2008 (1) TMI 122 - AT - Central Excise

Since cost of transportation has been separately reimbursed by the Railways to the Appellants it should be excluded from assessable value - Appellants claim that all the consignments have been sold from the factory gate has also been upheld by the Lower Appellate Authority hence demand set aside - Appellants doesn t press the Appeal for amount 8568/- towards duty on goods found short & hence same is confirmed penalty reduced to Rs. 8568 interest payable from date of detection

Summary

Issues involved:
1. Pre-deposit requirement dispensation and immediate appeal hearing.
2. Duty demand on goods found short during surprise check.
3. Disallowance of freight charges deduction from assessable value.
4. Exclusion of transportation cost reimbursed by Railways from assessable value.
5. Penalty reduction and interest payment on confirmed duty amount.

Analysis:
1. The Tribunal dispensed with the pre-deposit requirement and proceeded with the appeal hearing immediately upon consent from both sides, ensuring a swift resolution of the matter.

2. The demand against the Appellants included duty on goods found short during a surprise check by Excise Officials. The Appellants did not press the appeal regarding a small amount of Rs. 8568, which was confirmed. However, for a larger amount of Rs. 3,32,434, related to freight charges disallowance from the assessable value, the Tribunal examined the evidence. It was found that the impugned goods were supplied to Railway Authorities, who had placed orders specifying prices and freight amounts to be disbursed. The Tribunal concluded that the transportation cost reimbursed by Railways should be excluded from the assessable value, supported by relevant instructions. The demand of Rs. 3,32,434 was set aside based on these findings.

3. Regarding penalty imposition, the Tribunal reduced it to Rs. 8568, equal to the duty amount on shortages found and confirmed. The Appellants' concession led to this reduction. As for interest on the confirmed duty amount, it was deemed payable as per law from the date of detection, ensuring appropriate financial consequences for the Appellants.

4. The Tribunal's decision to partially allow the appeal by confirming a small duty amount while setting aside a larger demand showcases a balanced approach considering the evidence and legal provisions. The reduction in penalty and clarity on interest payment further demonstrate a fair and reasoned judgment in this case.