2016 (5) TMI 131 - AT - Central Excise

Re-assessment of Assessable value - revenue contended that after the clearance of the goods from their factory gate to their depot, the same were being sold at a higher price and as such the appellants are required to pay duty on their depot sale price. Held that - in terms of the earlier order of the Tribunal, the matter was remanded to adopt the approved assessable value at the factory gate in respect of sales made through depots, where there were sales from the factory gate as also from the depots. The lower authorities have done this exercise. While doing so, they have refused to adopt the approved assessable value. We note that the original dispute relates to the depot sale price and there was never any dispute as regards the correctness or otherwise of the factory gate assessable value approved in their price list. As such it is not open to the Revenue to re-assess the factory gate sale price and to recalculate the appellant s liability accordingly. Therefore, we are once again constrained to remand the matter to the lower authorities with clear and specific directions to adopt the approved assessable value in terms of the price lists filed in Part-I. Appellant submits that all such approved price lists are available with them and shall be produced before the original adjudicating authority. However, we make it clear that such exercise shall be done by the adjudicating authority only in respect of those models which are cleared from the factory gate as also from depots. In respect of models which are cleared exclusively from the depots, appellant has not contested the duty demand and has agreed that it is the depot sale price which has been correctly adopted by the lower authorities. Inasmuch as the issue relates to year 1993-94, we expect the adjudicating authority to finalize the de novo proceedings as soon as possible. - Matter remanded back

Summary

Issues:
- Impugned order passed in de novo proceedings
- Classification of telephone instruments under Chapter 85
- Allegation of selling goods at a higher price post-clearance
- Dispute regarding assessable value at factory gate
- Refusal to adopt approved assessable value
- Remand to lower authorities for clear directions

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore dealt with various issues arising from the impugned order passed in de novo proceedings. The case involved the classification of telephone instruments under Chapter 85 of the Central Excise Tariff Act 1985. The dispute centered around the allegation that goods were being sold at a higher price post-clearance, leading to a demand for duty payment on depot sale price. The appellants contended that their sales were not solely from depots but also from the factory gate, emphasizing the need to adopt the factory gate price as the assessable value.

The Tribunal, in an earlier order, directed the lower authorities to consider the appellant's factory gate sale prices. However, in the subsequent de novo proceedings, the authorities confirmed a reduced demand but faced criticism for not adopting the approved assessable value at the factory gate. The appellant argued that the approved assessable value, as per the price lists filed and approved by the Central Excise Officers, should be the basis for calculation, especially for models sold from both factory gate and depots.

The Tribunal agreed with the appellant that the dispute primarily concerned the depot sale price, and there was no initial challenge to the correctness of the factory gate assessable value approved in the price lists. Therefore, the Revenue was not entitled to reassess the factory gate sale price without specific grounds. Consequently, the matter was remanded to the lower authorities with clear instructions to adopt the approved assessable value from the filed price lists for models cleared from both factory gate and depots. The Tribunal emphasized the need for a swift resolution of the de novo proceedings, considering the vintage of the issue dating back to 1993-94.