2017 (5) TMI 1375 - AT - Central Excise

Valuation - Applicability of Rule 7 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - The goods manufactured were both sold at the factory gate and were also transferred to consignment agent - case of appellant is that Rule 7 is applicable only when all the goods manufactured by a manufacturer are sold only through depots and since in the present case all the goods are not sold through depot, therefore, the order passed by ld. Commissioner (Appeals) may be set aside - Held that - some of the goods were sold by the appellant at the factory gate - provisions of Rule 7, were not applicable in the present case - appeal allowed - decided in favor of assessee.

Summary

Issues:
Provisional assessment of goods transferred to consignment agent under Central Excise Valuation Rules.

Analysis:
The case involved two appeals concerning the provisional assessment of goods manufactured and transferred to a consignment agent. The goods were initially assessed provisionally at the time of clearance from the factory gate and were later finalized based on the actual consideration received. The finalization of provisional assessment for the period in question was ordered through specific Orders-in-Original. The Revenue challenged these orders, arguing that valuation should have been done under Rule 7 of the Central Excise Valuation Rules, determining the normal transaction value of goods sold from the consignment agent's place at the time of removal. The appeals were decided by the Commissioner (Appeals) who remanded the matter to the Original Authority for re-finalization of the provisional assessments consignment agent wise in accordance with Rule 7. The appellant appealed to the Tribunal against this decision.

During the hearing, the appellant's counsel contended that Rule 7 should not apply in this case as not all goods were sold through depots, citing a previous Tribunal order. The Revenue supported the Commissioner (Appeals) decision. After considering the arguments and records, the Tribunal referred to a previous Final Order which clarified that Rule 7 applies only when all goods are transferred to depots or consignment agent premises and not sold at the factory gate. Since some goods were indeed sold at the factory gate in this case, Rule 7 was deemed inapplicable. Consequently, the Tribunal set aside the Orders-in-Appeal and reinstated the original orders from 2008. The appeals were allowed, and the appellant was granted any consequential relief as per the law.

In conclusion, the Tribunal's judgment clarified the applicability of Rule 7 in cases where goods are sold through depots or consignment agents, emphasizing that the rule does not apply if goods are also sold at the factory gate. The decision provided a clear interpretation of the relevant provisions and upheld the original orders in favor of the appellant, granting them relief in accordance with the law.