2014 (1) TMI 310 - AT - Central Excise

Waiver of pre deposit - Valuation - Penalty u/s 11AC - Held that - On a perusal of the show-cause notice, it is noticed that the consignment agents have claimed the extra collection as due to LC charges and other bank charges and interest for delayed payments. This claim of the consignment agents appears to have not been investigated. Further, the appellant s claim that they are selling the final products ex-factory to various parties in addition to selling the goods through consignment agents has not been refuted. In view of the above, it appears that the extra collections (which according to the learned advocate, is in the range of 0.84% to 2.35%) are attributable to banking charges and interests on delayed payments. Therefore the same may not be includible in the assessable value - Stay granted.

Summary

Issues:
1. Alleged collection of excess amounts by consignment agents leading to duty demand.
2. Justification of extended period of limitation for duty demand.
3. Admissibility of extra collections by consignment agents in assessable value.
4. Waiver of pre-deposit of dues and stay of recovery.

Analysis:
1. The case involved allegations against the appellants, who are manufacturers of pig iron and MS billets, for selling products through consignment agents who allegedly collected amounts in excess of invoice prices for excise duty payment. A show-cause notice was issued, confirming a sum of Rs. 91,08,063/- along with interest and penalties. Additionally, a penalty of Rs. 50,000/- was imposed on a company official.

2. The appellants contended that the extra amounts collected by consignment agents were not received by them, challenging the justification for the duty demand. They also argued against the invocation of an extended period of limitation for the demand.

3. Upon careful consideration of submissions, it was observed that the consignment agents claimed the extra collection as due to various charges, which were not thoroughly investigated. The appellants' assertion of selling products ex-factory to different parties alongside consignment sales was not refuted. The tribunal found that the extra collections were likely attributable to banking charges and interest on delayed payments, hence not includible in the assessable value.

4. Consequently, the tribunal ordered a waiver of pre-deposit of dues as per the impugned order and granted a stay on recovery until the appeals were disposed of. Both applications for waiver and stay were allowed, ensuring relief for the appellants pending the final resolution of the case.