2003 (10) TMI 182 - AT - Central Excise

Summary

Issues: Application for stay arising from order-in-appeal upholding duty demand and penalty imposition under Central Excise Act and Rules for a 100% EOU clearing goods to DTA, with a dispute over assessable value based on sales to consignment agent.

Analysis:
1. The appeal pertains to a 100% EOU clearing goods to DTA, with duty demanded and penalty imposed by the Commissioner of Central Excise (Appeals). The duty amounting to Rs. 10,60,813/- and penalty of Rs. 2,500/- were upheld, based on the allegation that sales to the consignment agent were not at arms length, leading to a dispute over the assessable value under Section 4 of the Central Excise Act.

2. The appellant argued that as a 100% EOU, the provisions of Section 4 of the Central Excise Act should not apply to them. They contended that goods cleared to DTA by a 100% EOU should be chargeable at the rate applicable to imported goods under Section 3 of the Act, with the value determined in accordance with the Customs Act, not the Central Excise Valuation Rules. Additionally, they claimed that the authorities erred in not considering factors like Central Excise duty, octroi, and transportation charges while calculating the assessable value.

3. The Department, represented by the ld. DR, cited Tribunal decisions to support the application of Central Excise Valuation Rules in determining the value of goods sold through the consignment agent. They argued that even though duties paid by EOUs on sales to DTA are calculated at a specific rate, they are essentially Central Excise duties, justifying the use of the Valuation Rules.

4. After hearing both parties, the Tribunal opined that the Central Excise Valuation Rules were correctly applied to ascertain the assessable value of goods sold by the appellant through the consignment agent. The Tribunal did not find merit in the argument that valuation should have been done under Section 14 of the Customs Act. While a complete case for waiving the pre-deposit of demanded duty was not established, the Tribunal partially admitted the application, requiring the appellant to deposit a specific sum within a designated timeframe, with further compliance instructions provided to avoid appeal dismissal.

5. In conclusion, the Tribunal partially admitted the application for waiver of pre-deposit of duty and penalty, directing the appellant to make a specified deposit within a set timeframe. The decision highlighted the correct application of Central Excise Valuation Rules in determining the assessable value, with a provision for further examination of allowances for additional charges at a later stage.