2016 (7) TMI 1145 - AT - Central Excise

Assessable value - sales made to related and unrelated persons - Held that - As going through the impugned order of the Commissioner (Appeals) we find that the said order on the face of it travels beyond the jurisdiction inasmuch as it stands challenged before the Appellate Authority by the appellant only in respect of the confirmation of demand of 96, 000 approximately. It is an admitted fact that the part of the impugned order of the Original Adjudicating Authority dropping the demand was not challenged by the Revenue before the Commissioner (Appeals) in which case there was no occasion for the Appellate Authority to deal with or adjudge the correctness of that part of the order dropping the demand. It also stands admitted before us by the Revenue that there was no cross appeal filed by the Revenue before the Commissioner (Appeals). In such a scenario we agree with the ld. Advocate that the impugned order passed by the Commissioner (Appeals) had travelled beyond the scope of the appeal before him and is required to be set aside on the said ground itself. Thus we set aside the impugned order and remand the matter to the Commissioner (Appeals) for fresh consideration only in respect of the demand involved in the appeal filed by the appellant

Summary

Issues:
1. Assessment of sales made to related persons.
2. Confirmation of demand by the Original Adjudicating Authority.
3. Jurisdictional overreach by the Commissioner (Appeals).
4. Applicability of legal decisions on the demand.

Analysis:
1. The judgment addresses the issue of assessing sales made by the appellants to related persons, particularly focusing on the pricing and subsequent resale of goods. The Original Adjudicating Authority confirmed a demand of &8377; 96,776 against the appellants based on the resale value of goods by one buyer to the market. However, it was noted that in most cases, sales to related and unrelated persons were at the same price, with related persons using the goods captively and not for further resale.

2. The appellants challenged the Original Adjudicating Authority's decision before the Commissioner (Appeals), contesting the duty confirmation and penalty imposition. The Commissioner (Appeals) took a broad approach by setting aside the entire adjudication order, stating that the dropping of demand and partial confirmation were not sustainable. This action was deemed beyond the scope of the appeal, as the Revenue did not challenge the dropped demand portion, leading to the order being remanded for fresh adjudication.

3. The judgment highlighted the jurisdictional overreach by the Commissioner (Appeals) in addressing issues beyond the scope of the appeal. It was observed that the Commissioner's decision to set aside the entire order, including aspects not challenged by the parties, was not in line with the appeal's specific grounds. This led to the conclusion that the impugned order needed to be set aside based on this procedural error.

4. Lastly, the judgment considered the applicability of legal precedents on the demand issue. The appellant cited the decisions of the Tribunal and the Supreme Court in support of their position that the demand may not stand. Due to the Commissioner (Appeals) not deciding on the merits, the matter was remanded for fresh consideration solely concerning the demand under appeal, allowing the Commissioner to evaluate the issue in light of the legal decisions referenced by the appellant.