2004 (11) TMI 217 - AT - Central Excise

Summary

Issues:
1. Determination of assessable value based on price declarations.
2. Interpretation of Central Excise Act and Rules regarding assessable value.
3. Requirement of filing revised price declarations.
4. Legality of levying penalty under Rule 173Q.

Issue 1: Determination of assessable value based on price declarations:
The appeal was filed against an order demanding Central Excise Duty based on the appellant declaring a price for their product but clearing it at a lower price. The appellant argued that the assessable value should be based on the actual invoice price, as each invoice was considered a price declaration itself. They contended that no duty could be demanded simply because revised price declarations were not filed. The Department insisted on the mandatory filing of declarations but did not dispute the actual invoice prices charged by the appellant. The Tribunal agreed with the appellant, citing previous cases where duty was paid on the actual price charged, not the declared price. The appeal was allowed, emphasizing that the price at which the goods were sold was the sole consideration for the sale, as per Section 4(1)(A) of the Act.

Issue 2: Interpretation of Central Excise Act and Rules regarding assessable value:
The appellant's case covered the period from December 1994 to September 1998, during which the assessable value was determined based on the actual invoice price for each clearance. The Tribunal highlighted the changes in the law, including the inclusion of depots in the definition of "Place of removal." The Tribunal referenced Supreme Court judgments and Circulars by the Central Board of Excise & Customs to support the appellant's argument that the assessable value should be based on actual invoice prices, not old declarations. Previous cases were cited to show that the demand based on procedural rules was not sustainable, and the Tribunal ultimately allowed the appeal, providing relief to the appellant.

Issue 3: Requirement of filing revised price declarations:
The Department issued show cause notices based on old declarations, leading to a demand for differential duty. The appellant argued that the invoice price should prevail, especially when there was no dispute regarding the prices charged from buyers. The Tribunal agreed that the old declarations should not override the actual invoice prices, especially when there was no evidence of overcharging or flow back of money. The Tribunal emphasized that the Department's demand was solely based on old declarations, not the actual sales transactions, and allowed the appeal in favor of the appellant.

Issue 4: Legality of levying penalty under Rule 173Q:
The appellant contested the imposition of penalties under Rule 173Q, arguing that there was no contravention of the law. The Tribunal agreed with the appellant, stating that there was no illegality in determining the assessable value based on actual invoice prices. The Tribunal referenced previous cases where penalties were set aside when the goods were sold at lower prices than those declared. Ultimately, the Tribunal allowed the appeal and provided consequential relief to the appellant, emphasizing that the Department was not justified in claiming differential duty based on old declarations.