2011 (12) TMI 432 - AT - Central Excise

Valuation of goods - variation in MRP in different areas - Department alleges that higher the MRP shall be assessable value for all the goods sold in an area - Held that - unable to find any cogent reason recorded in the impugned order to deny variation. Hypothetical proposition is not acceptable to law unless the proposition stands to reason why variation in not permissible - authority does not demonstrate any exercise made by him independently to deny variation. It is established principle of law that the Appellate Authority when reaches to conclusion on the basis of fact, should support his decision testing the fact with law and evidence and state reasons of his decision - Decided in favour of assessee.

Summary

Issues:
1. Variation in Maximum Retail Price (MRP) affecting assessable value determination.
2. Permissibility of claiming variations in MRP for charging duties.

Analysis:
1. Issue 1 - Variation in MRP affecting assessable value determination:
The appellant argued that the department's contention of higher MRP leading to assessable value for all goods sold in an area is unjustified. The appellant justified the variation in MRP based on delivery costs for different areas. Citing precedents like CCE, Jaipur v. Guljag Chemicals, the appellant sought waiver of pre-deposit and appealed for a decision in their favor. The Tribunal noted the absence of any questioning by the department regarding different MRPs and criticized the department's abrupt conclusion on assessable value solely based on MRP without considering cost elements. Relying on legal principles, the Tribunal found the department's order lacking in reasoning and support for denying variations in MRP, ultimately allowing the appeal and dispensing with the pre-deposit requirement.

2. Issue 2 - Permissibility of claiming variations in MRP for charging duties:
The learned DR contended that para 6 of the appellate orders did not allow the appellant to claim variations in MRP, asserting that higher MRP should be the basis for charging duties if variations are claimed. However, the Tribunal, after hearing both sides and examining the records, found the department's argument lacking in substantial reasoning. The Tribunal emphasized the necessity for the Appellate Authority to provide sound reasoning supported by law and evidence when reaching a decision. In this case, the Tribunal found para 6 of the order deficient in demonstrating any independent exercise by the authority to deny variations in MRP. Consequently, the Tribunal allowed the appeal, highlighting the importance of justifying decisions with proper reasoning and evidence in accordance with legal principles.

In conclusion, the Tribunal allowed the appeal, emphasizing the need for decisions to be supported by law and evidence, and critiquing the lack of substantial reasoning in the department's order regarding variations in MRP affecting assessable value determination.