2013 (12) TMI 1084 - AT - Central Excise

Determination of Assessable value - Waiver of Pre-deposit Held that - Following Ispat Industries Ltd. VS. Commr. of Central Excise, Raigad 2007 (2) TMI 5 - CESTAT, MUMBAI - the assessable value of stock transferred goods should be determined as per the price at which such goods were sold to independent buyers - it cannot be denied that the price at which the goods were sold to independent buyers ought to be adopted for the purposes of determination of assessable value of goods, captively consumed as well as cleared to sister unit on stock transfer basis applicant directed to submit Rupees two crores as Pre-deposit upon such submission rest of the duty to be waived till the disposal Stay granted.

Summary

Issues:
- Waiver of pre-deposit of duty and penalty under Section 11AC of the Central Excise Act, 1944.

Analysis:
The case involved an application for the waiver of pre-deposit of duty amounting to Rs.12.39 Crores and an equal penalty imposed under Section 11AC of the Central Excise Act, 1944. The appellant, engaged in the manufacture of various materials falling under Chapter 72 of CETA, 1985, had cleared quantities of goods to their sister unit and for captive consumption during a specific period. The appellant's advocate argued that there was an error in the calculation of demand, claiming that an amount of Rs.3.65 Crores had been erroneously included in the total demand. The Department's representative contended that the assessable value of the goods should be determined based on the price at which the goods were sold to independent buyers, citing a judgment of the Larger Bench of the Tribunal in a previous case.

Upon hearing both sides and examining the records, the Tribunal found merit in the appellant's argument regarding the error in the calculation of demand. The Tribunal also noted that the price at which the goods were sold to independent buyers should be considered for determining the assessable value of goods consumed internally or transferred to a sister unit. Consequently, the Tribunal directed the appellant to deposit Rs.2.00 Crores within eight weeks, with the balance amount of dues adjudged to be waived upon this deposit. The recovery of the remaining amount was stayed during the pendency of the appeal. Failure to comply with the deposit requirement would lead to the dismissal of the appeal without further notice. The Tribunal disposed of the stay petition accordingly.