2017 (5) TMI 1386 - AT - Central Excise

Valuation - the appellant was clearing their final products on payment of duty to their depot at Navi Mumbai for onward sale to the wholesale dealers - Held that - For determining assessable value in such cases, the CBEC has also issued a Circular No.251/85/96-CX dt. 14/10/1996 wherein it was clarified that the price prevailing at the depot on the day of clearance from the factory is to be taken as the assessable value and in such case, if the price is not available, then the price at the time nearest to the time of removal of the goods is to be taken as assessable value - demand attributable to those invoices whose date taken by the Department is subsequent to the date of clearance from the factory cannot be sustained. Consequently, we are constrained to set aside demand amounting to ₹ 14,61,527/-. Extended period of limitation - Held that - while submitting the details of depot invoices where refund was admissible, they have concealed the details of clearances in respect of which depot price sale was higher than the stock transfer value - also, appellant has failed to mention the fact that they were adopting the price listed in their website and the fact came to the notice only when the Departmental officers visited the factory and carried out investigations - the demand does not merit setting aside on the ground of time bar. Penalty - Held that - The controversy in the present case is pertaining to the period immediately after commencement of manufacture by the appellant in their Bangalore factory. Consequently, we are of the view that there is no justification for imposition of penalty on the appellant and hence the same is set aside. The demand is upheld to the extent of ₹ 22,61,058/-. The balance of demand amounting to ₹ 14,61,527/- is set aside. The amount of demand already paid by the appellant is liable to be appropriated - Interest will be liable to be paid at the applicable rate - Penalty imposed is set aside - appeal allowed - decided partly in favor of assessee.

Summary

Issues involved:
- Valuation of goods for excise duty purposes based on depot prices
- Time bar for demanding excise duty
- Adjustment of excess duty paid against short payment
- Imposition of penalty on the appellant

Valuation of goods for excise duty purposes based on depot prices:
The appeal involved a dispute regarding the valuation of goods for excise duty purposes based on depot prices. The appellant, engaged in the manufacture of personal computers, cleared goods to their depot at Navi Mumbai for onward sale to wholesale dealers. The issue centered around determining the assessable value based on the price prevailing at the depot on the date of removal from the factory. The appellant argued that the duty should only be paid when the assessable value at the time of clearance from the factory is less than the depot prices prevalent on the same or prior day. The Tribunal found that adopting depot prices subsequent to the date of clearance was not in line with valuation provisions, leading to the setting aside of a portion of the demand amounting to ?14,61,527.

Time bar for demanding excise duty:
The appellant contended that the demand for excise duty, raised through a show-cause notice issued beyond the standard six-month period from the period of dispute, should be considered time-barred. However, the adjudicating authority disagreed, stating that the time bar was not applicable. The Tribunal upheld this decision, ruling that the demand was not subject to being set aside on grounds of being time-barred.

Adjustment of excess duty paid against short payment:
The appellant sought to adjust excess duty paid against short payment without filing separate refund claims. They argued that they had provided details of stock transfer invoices where refunds were admissible, indicating no suppression of facts. However, the Tribunal supported the findings of the Commissioner, who noted that the appellant had concealed details of clearances where depot prices exceeded stock transfer values. Consequently, the Tribunal refrained from ordering the requested adjustment, emphasizing that the refund claims would be considered and settled separately.

Imposition of penalty on the appellant:
The imposition of a penalty amounting to ?20,29,150 on the appellant was another crucial issue. The Tribunal considered the appellant's manufacturing activity commencement in April 1998 and the evolving pattern of duty payment for depot clearances post-1996. Given the changing landscape and the appellant's circumstances, the Tribunal found no justification for the penalty imposition. Citing a previous Tribunal decision, the penalty was set aside, aligning with the appellant's argument that penalty imposition was unwarranted.

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