2017 (2) TMI 1064 - AT - Central Excise

Valuation - demand on the ground that the value of the comparable goods is more than the value at which the appellants have cleared the goods to AWCICL - Held that - the sale transaction to the independent buyer is a vital factor to arrive at the correct assessable value. Since this aspect has not been looked into by both the lower authorities, obviously because the appellants also have not submitted the details to lower authorities. Therefore, the matter needs to be remanded to the original authorities - appeal allowed by way of remand.

Summary

Issues: Assessment of excise duty based on the value of goods supplied to a related party, failure to provide details of sales to independent buyers, sustainability of demand for differential duty.

Analysis:
1. Facts of the Case: The appellant, engaged in manufacturing goods falling under specific chapters of the Central Excise Tariff Act, entered into an agreement with another company for the supply of Sulphuric Acid. Discrepancies arose regarding the pricing of the goods supplied to the related party compared to the market value.

2. Show-Cause Notice and Appeal: A show-cause notice was issued, and demand for differential duty was confirmed due to the perceived undervaluation of goods supplied to the related party. The appellant's appeal to the Commissioner (Appeals) was rejected, leading to the appeal before the Tribunal.

3. Appellant's Argument: The appellant contended that the goods were sold to other customers at the same price as to the related party, justifying the pricing. However, the appellant failed to provide evidence of sales to independent buyers before the lower authorities.

4. Revenue's Position: The Assistant Commissioner representing the Revenue reiterated the findings of the impugned order, emphasizing the need for a thorough assessment of the assessable value.

5. Tribunal's Decision: After considering both sides' arguments and reviewing the records, the Tribunal noted the absence of details regarding sales to independent buyers, crucial for determining the correct assessable value. Consequently, the matter was remanded to the original authorities for a fresh assessment.

6. Remand Order: The Tribunal directed the original authority to consider any evidence of sales to independent buyers provided by the appellant. If the prices charged to independent buyers align with those charged to the related party, the same pricing should apply for excise duty calculation.

7. Final Verdict: The Tribunal allowed the appeal by remanding the case for a reevaluation based on the availability of evidence regarding sales to independent buyers, emphasizing the importance of establishing consistent pricing across transactions.

This judgment underscores the significance of providing comprehensive documentation and evidence to support pricing decisions, especially in cases involving related party transactions subject to excise duty assessment.