2001 (3) TMI 166 - AT - Central Excise

Summary

Issues involved: Valuation of photocopiers for levy of Central Excise duty

Analysis:
The issue in the present appeal revolves around the valuation of photocopiers sold in retail for the purpose of Central Excise duty levy. The appellants, who are manufacturers of photocopiers, claimed a deduction of 28% from the retail price to determine the assessable value of their goods. This claim was based on the deduction allowed to their competitors, namely, Modi Xerox Ltd., at the same percentage. However, this claim was rejected in both the order-in-original and the order-in-appeal, leading to the current appeal.

The appellants argued that during the relevant period, goods were assessed at their wholesale price as per Section 4 of the Central Excise Act, 1944, even if they were sold in retail. They contended that a deduction was necessary from the sale price to establish the assessable value, which should be the wholesale price. They highlighted that their competitors had been allowed a 28% deduction, as approved by the Supreme Court in the case of Modi Xerox Ltd. v. Collector of Customs and Central Excise. The appellants also pointed out the Central Board of Excise and Customs instruction advising deduction based on comparable goods produced by other manufacturers. Therefore, they urged that the appeal should be allowed, permitting a 28% deduction from the retail price for determining the assessable value.

In the judgment, it was noted that during the relevant period under Section 4 of the Central Excise Act, 1944, assessment was based on the wholesale price, with deductions allowed for retail sales. The Central Board of Excise and Customs had advised field formations to allow deductions based on comparable positions of other manufacturers, as per their instruction. Given that the appellants' competitors were granted a 28% deduction from the retail price for assessing the value of their goods, and considering that all manufacturers in the same industry were allowed deductions at standard rates by the Revenue for goods assessed based on MRP, it was deemed appropriate to allow the same deduction rate to the appellants. Therefore, the judgment ordered that the photocopiers manufactured by the appellants be assessed to duty after allowing a 28% deduction from the retail price, with consequential relief to be provided upon reassessment of the goods. The appeal was allowed, and the impugned orders were set aside.