2015 (10) TMI 903 - AT - Central Excise

Determination of the assessable value of manufactured goods sold from the depots - held that - Tribunal has earlier remanded the case to the adjudicating authority for de novo adjudication on the basis of evidences on record. Consequently, after discussing in detail each and every element of discounts/expenses, applying the principle of law laid down in this regard, dropped substantial amount of demand after re-determining the assessable value of the goods sold from the depots. However, we are constrained to note that the Ld. Commissioner (Appeals) while accepting the Revenue s appeal and setting aside the order-in-original, failed to record any reason in support of his conclusion. Needless to mention that an order without reason is bad in law and cannot be sustained. - matter remanded back - Decided in favour of assessee.

Summary

Issues involved: Application seeking waiver of pre-deposit of duty and penalty under Section 11AC of CEA, 1944; Determination of assessable value of manufactured goods sold from depots; Failure of the Ld. Commissioner (Appeals) to record reasons in allowing the Revenue's appeal.

Analysis:

1. Waiver of Pre-deposit of Duty and Penalty:
The applicant sought waiver of pre-deposit of duty amounting to Rs. 26.20 Lakhs and an equal amount of penalty imposed under Section 11AC of the Central Excise Act, 1944. The Ld. Sr. Advocate highlighted that certain discounts and expenses were initially not allowed to be deducted from the depot price, resulting in a demand that was later substantially reduced after re-determining the assessable value of goods sold from the depots. The Tribunal, after hearing both sides, waived the requirement of pre-deposit and proceeded to dispose of the appeal with the consent of both parties.

2. Determination of Assessable Value:
The core issue revolved around the determination of the assessable value of manufactured goods sold from the depots during the period 1996-2000. The applicant contended that various discounts and expenses, including quantity discount, contract discount, turnover discount, special discount, freight, octroi duty, and Turn Over Tax, were not initially allowed to be deducted from the depot price. The adjudicating authority, upon re-examination and considering legal principles, allowed the deduction of these discounts and expenses, resulting in a significant reduction in the demand. However, the Ld. Commissioner (Appeals) failed to provide any reasons for accepting the Revenue's appeal and setting aside the original order, leading the Tribunal to set aside the impugned order-in-appeal and remand the matter for the Ld. Commissioner (Appeals) to record reasons for the decision.

3. Failure to Record Reasons by Ld. Commissioner (Appeals):
A critical aspect of the judgment was the failure of the Ld. Commissioner (Appeals) to provide any reasons for accepting the Revenue's appeal and overturning the order-in-original. The Tribunal emphasized that an order without reasons is legally untenable and cannot be upheld. Consequently, the Tribunal set aside the impugned order and directed the Ld. Commissioner (Appeals) to record reasons for the decision while ensuring a reasonable opportunity for the appellant to present their case. The matter was remanded for fresh consideration with proper justification for the decision-making process.