2011 (8) TMI 667 - AT - Central Excise

Valuation - Good sold to Related Person as well as Independent buyers - In assessee own case of (2004 -TMI - 53600 - CESTAT, SOUTH ZONAL BENCH, BANGALORE) & further affirmed by supreme court - valuation is to be done by adopting the price at which the assessees sold the goods to independent (unrelated) buyers.

Summary

Issues:
Challenge to demand confirmed by Commissioner, Central Excise based on pricing of goods sold to related persons, Application of Rule 4 for determining the value of clearance, Verification of duty payment on goods sold to independent buyers, Remand for re-quantifying duty payable.

The judgment addressed the challenge against a demand confirmed by the Commissioner, Central Excise, amounting to Rs.3,15,44,454. The demand was upheld due to pricing of goods sold by the assessee to related persons in the open market. The Tribunal noted that the goods were sold to both related persons and independent buyers. Referring to a previous decision in the assessee's own case, the Tribunal applied Rule 4, stating that the value of clearance should be determined based on the price at which the goods were sold to independent buyers. This principle was further supported by a decision of the Apex Court and another Tribunal case. Consequently, the Tribunal ruled that valuation should be based on the price at which the assessees sold goods to independent buyers. The Tribunal acknowledged the submission that duty had been discharged on such price but ordered verification, leading to a remand for re-quantifying the duty payable by the assessees. The reassessment was expected to reduce the demand to approximately Rs.1.50 crores, with fresh orders to be issued after hearing the assessees.

The judgment concluded by disposing of the appeal through a remand for the re-evaluation of the duty payable in accordance with the pricing of goods sold to independent buyers.