2005 (12) TMI 29 - AT - Central Excise

Central Excise - Valuation - Related person - TV sets sold through related person and claimed deduction in respect of freight, sales tax and trade discount is admissible

Summary

Issues: Dispute on excise valuation of TV sets sold to a related person, deductions to be made while determining assessable value, acceptance of expenditure details, adoption of approved assessable values for assessment.

In this case, the Appellate Tribunal in New Delhi heard appeals against an impugned order concerning duty demands and penalties on two manufacturers of colour television sets and a related buyer. The dispute revolved around excise valuation of TV sets sold to the related buyer, where the assessable value was contested. The appellants claimed deductions for trade discount, freight, and sales tax, but the Commissioner allowed deductions only for one manufacturer, citing lack of proof of actual amounts spent. The manufacturers argued that they provided detailed expenditure information with a Chartered Accountant certificate, which was not accepted. They contended that the assessable value should be based on the approved values of identical sets manufactured and sold by the related buyer at the same price, without any distinction. The Tribunal noted that the assessable value should be based on the sale price of the related buyer and approved the values of identical sets sold by the buyer for assessing the sets in question. The Tribunal highlighted the need for deductions such as sales tax, freight, and trade discount as per Section 4 of the Central Excise Act, which were not allowed in the impugned order. Consequently, the Tribunal set aside the order and remanded the case to the Commissioner for a fresh assessment based on approved assessable values, allowing deductions for freight, sales tax, and trade discount where applicable.

In conclusion, the Tribunal emphasized the importance of adopting approved assessable values and allowing necessary deductions while determining the assessable value of goods sold to related persons for levying central excise duty. The judgment focused on ensuring a fair assessment process by considering relevant expenditure details and following legal provisions for deductions, ultimately directing a fresh assessment with proper consideration of approved values and deductions for accurate valuation.