2004 (7) TMI 202 - AT - Central Excise

Summary

Issues:
Application for waiver of pre-deposit of duty and penalty based on payment of duty at the prevalent rate on clearance from the factory and Board Circular No. 251/85/96-CX.

Analysis:
The applicant filed an application seeking a waiver of pre-deposit of duty amounting to Rs. 5,09,95,645/- and an equivalent penalty. The duty was demanded concerning the clearance of goods to various dealers and consignment agents, treated as agents by the applicant. The applicant contended that duty was paid at the prevalent rate upon clearance from the factory, aligning with the price at which goods were cleared from the depot. Notably, approximately 40% of the product was cleared directly to independent customers. The applicant relied on Board Circular No. 251/85/96-CX, dated 14-10-96, to support their position.

Upon examination, it was found that the applicants indeed paid duty at the time of clearance from the factory at the prevailing rate corresponding to the depot's clearance price. The Board's clarification emphasized that assessments need not be provisional until the actual sale price from places other than the factory gate is determined. The assessable value was to be based on the price at which goods of the same destination were sold from the depot on the date of clearance from the factory gate. The Board's circular provided a clear framework for valuation, considering subsequent sales at different prices from the depot.

Considering the contentions and the Board Circular's guidance, the Tribunal deemed it a suitable case for the waiver of pre-deposit of duty and penalty. Consequently, the pre-deposit of duty and penalty was waived for the hearing of the appeal arguments, with the matter adjourned to 28th October, 2004, for further arguments. The decision was made in light of the applicant's compliance with duty payment procedures and the relevant circular's provisions, ensuring a fair and just approach to the case.