2015 (4) TMI 523 - AT - Central Excise

Waiver of pre deposit - Valuation - Demand of differential duty - Held that - Applicant cleared the goods in reel form to the cutting centers on payment of excise duty at value which is lower than the value of goods sold in sheet form from the cutting centers. While clearing the goods from the factory of the applicant, the transaction was not of sale whereas the same was transfer of goods to cutting centers. After cutting the goods in the sheet form were actually sold by the same i.e. applicant from the place of cutting centers. As per Section 4 of Central Excise Act read with Rule 6 of Valuation of Rules, it is the value at which the goods is sold from the place of sale of goods shall be the transaction value. Therefore in the present case, we are of the prima facie view that both the lower authorities have correctly and legally confirmed and upheld the differential duty. - Partial stay granted.

Summary

Issues:
- Appeal against Order-in-Appeal No. NGP/EXCUS/000/APL/846-847/13-14
- Upholding of order-in-original No 01/DEM/CND/13-14
- Rejection of appeal by Commissioner (Appeals)
- Confirmation of demand and penalty under Rule 25 of the Central Excise Rules, 2002
- Prima facie view on correct confirmation of differential duty
- Direction for pre-deposit of entire duty amount

Analysis:
The judgment revolves around a stay application stemming from an Order-in-Appeal passed by the Commissioner (Appeals) upholding the order-in-original, in which the appellant's appeal was rejected. The case involves the appellant, engaged in manufacturing paper and paper board, clearing goods to cutting centers for conversion into sheet form and subsequent sale at a higher price. The adjudicating authority confirmed a demand and penalty under Rule 25 of the Central Excise Rules, 2002, which was challenged by the appellant through appeals.

Upon review, the Tribunal noted that the goods were cleared to cutting centers at a value lower than the price at which they were sold in sheet form. The Tribunal emphasized that the transaction from the factory to cutting centers was not a sale but a transfer of goods. Citing Section 4 of the Central Excise Act and Rule 6 of Valuation Rules, the Tribunal held that the value at which goods are sold from the place of sale determines the transaction value. Consequently, the Tribunal opined that the lower authorities correctly confirmed the differential duty.

As a result, the Tribunal directed the appellant to make a pre-deposit of the entire duty amount within six weeks. Upon compliance with this directive, the balance amount of interest and penalty would be waived. The judgment underscores the legal principles governing valuation of goods under the Central Excise Act and upholds the decision on differential duty, emphasizing the importance of transaction value in determining excise duty liabilities.

This comprehensive analysis of the judgment highlights the key issues addressed, the legal reasoning employed, and the ultimate directive issued by the Tribunal regarding the pre-deposit of duty amount in the context of the appellant's case.