2005 (2) TMI 121 - SC - Central Excise

Benefit of Notification No. 120/75-C.E., dated 30th April, 1975 - Invoice price - Held that - Department has made no effort to ascertain whether the invoice price had been influenced by any commercial, financial consideration or by reason of the relationship. They have only proceeded on the basis that M/s. Fenner (India) Limited being a related person the invoice price was influenced. We also find the submissions made on behalf of the Respondents that they were also selling to other parties at the same price has not been rebutted by the Department. It is clear that merely because M/s. Fenner (India) Limited is the holding company and a related person, does not by itself show that the invoice price is influenced. In the absence of any proof or material to show that the invoice price was influenced the benefit of the Notification cannot be denied - Decided against Revenue.

Summary

Issues:
Interpretation of Notification No. 120/75-C.E. dated 30th April, 1975 regarding conditions for availing benefits.
Whether the invoice price was influenced by any commercial or financial relationship between the manufacturer and the buyer.
Burden of proof on the Department to show influence on invoice price.
Evaluation of evidence by the Tribunal and its decision.

Analysis:
The case involved an appeal against the Judgment of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) regarding the availing of benefits under Notification No. 120/75-C.E. dated 30th April, 1975. The Department issued a show cause notice alleging that the sales were made to a related company, influencing the invoice price, which would violate condition (iv) of the Notification.

The key issue revolved around whether the invoice price was indeed influenced by the relationship between the manufacturer and the buyer, as claimed by the Department. The Tribunal, in its judgment, found no evidence to support the Department's claim. It emphasized that the burden of proof lay on the Department to establish that the invoice price was influenced by any commercial or financial relationship, which was not substantiated.

Upon reviewing the adjudicating order and available material, the Supreme Court noted that the Department failed to demonstrate any effort in proving that the invoice price was influenced. The Court highlighted that merely being a related person or holding company does not automatically imply influence on the invoice price. The Department's failure to rebut the Respondents' claim of selling to other parties at the same price further weakened their argument.

Ultimately, the Supreme Court upheld the Tribunal's decision, stating that in the absence of concrete proof or material showing that the invoice price was influenced, the benefit of the Notification could not be denied. The Court found no fault in the Tribunal's judgment and dismissed the Civil Appeal, with no order as to costs.