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2020 (1) TMI 671 - AT - Central ExciseValuation of manufactured goods - Reebok brand shoes - rejection of declared value - it was alleged that various raw materials imported by the appellants were alleged to be undervalued on their import into India - appellant has submitted that there were no allegations in the show cause notice that the price at which the goods were sold by the appellant to the buyers was not the sole consideration - extended period of limitation. HELD THAT - It is clear from the precedent decision of this Tribunal in GURU NANAK REFRIGERATION CORPN. VERSUS COLLECTOR OF C. EX., NEW DELHI 1995 (10) TMI 115 - CEGAT, NEW DELHI affirmed by Hon ble Supreme Court of India in COLLECTOR OF C. EX., NEW DELHI VERSUS GURU NANAK REFRIGERATION CORPN. 2003 (3) TMI 100 - SUPREME COURT that if there are no allegations that there was no price at which the goods were sold by the appellant and if there are no allegations that the price was not the sole consideration for the sale and if there were no allegations that the buyers were not at arm s length and if there are no allegations that there was flow back of money from the buyers to the assessee then revenue cannot reject the price declared by the appellant. In the present case there were no allegations that the price of the goods was not available. In fact the goods were cleared by the appellant during the relevant period with total assessable value of ₹ 28,99,988/- as stated in the show cause notice - also there were no allegations in the show cause notice that price was not sole consideration for sale and there were no allegations that there was any flow back of money from the buyers to the appellant. Therefore, there are no grounds for holding that the appellants have undervalued there clearances during the period from August, 1996 to December, 1996. Appeal allowed - decided in favor of appellant.
Issues:
- Re-determination of assessable value of goods cleared by the appellant during a specific period. - Allegations of undervaluation and demand for differential Central Excise duty. - Application of extended period of limitation. - Interpretation of Hon'ble Supreme Court judgments in similar cases. - Appeal against the order passed by the Original Adjudicating Authority and Commissioner (Appeals). Analysis: 1. Re-determination of assessable value: The appeal arose from a show cause notice issued to the appellants regarding the re-determination of the assessable value of 'Reebok' brand shoes cleared during a specific period. The appellants contested that there were no grounds to reject the declared assessable value as there were no allegations of the price not being the sole consideration or any flow back of consideration. They relied on a Tribunal decision affirmed by the Supreme Court, emphasizing the importance of the price at which goods were sold by the appellant. The Tribunal noted that if there were no such allegations, the revenue cannot reject the declared price. Ultimately, the Tribunal found no grounds for undervaluation during the specified period and set aside the impugned order. 2. Allegations of undervaluation and demand for duty: The show cause notice alleged undervaluation based on an earlier Customs notice and sought a differential Central Excise duty. The appellants argued against the re-determination of assessable value, citing the inapplicability of the Customs notice for the specified period. They also contended that the extended period of limitation was not valid due to the absence of allegations of suppression or misstatement. The Tribunal concurred with the appellants, emphasizing that the Customs notice for re-assessment was impermissible under the law. The Tribunal found no merit in the allegations raised in the show cause notice and allowed the appeal. 3. Application of extended period of limitation: The appellants challenged the invocation of the extended period of limitation, asserting that there were no allegations of suppression or misstatement in the show cause notice. The Tribunal agreed with the appellants, highlighting the lack of such allegations as a basis for rejecting the extended period of limitation. This aspect contributed to the Tribunal's decision to set aside the impugned order. 4. Interpretation of Supreme Court judgments: The Tribunal referred to previous Supreme Court judgments to support its decision. It emphasized the importance of the price at which goods were sold by the appellant, as well as the absence of specific allegations regarding the price not being the sole consideration or any flow back of money. By aligning the case facts with the legal principles established by the Supreme Court, the Tribunal upheld the appellants' contentions and allowed the appeal. 5. Appeal against previous orders: The appellants had initially contested the demand confirmed by the Original Adjudicating Authority, leading to an appeal before the Commissioner (Appeals) who upheld the original order. Dissatisfied with this decision, the appellants approached the Tribunal, which ultimately set aside the impugned order and allowed the appeal, granting the appellants consequential relief as per the law. This comprehensive analysis of the judgment from the Appellate Tribunal CESTAT ALLAHABAD showcases the detailed considerations and legal interpretations that led to the final decision in favor of the appellant.
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