2009 (7) TMI 265 - AT - Central Excise

Refund clearance of excisable goods from the factory to the depots and also having sale at the factory gate. The respondent paid the duty on factory gate sales as per the transaction value and there is no dispute about the same. In respect of transfers made to the depots, they initially paid duty adopting the price prevailing at factory gate. However, subsequently they have claimed that the sale prices of such goods at the depot at the date of clearances were lower and preferred refund claims. - When the goods are sold at a particular price on a particular day at the factory gate, the claim that goods transferred to depot should be assessed at price lower that the said price appears to be against the scheme of valuation provided under Section 4 and the rules made thereunder. No evidence produced about the lower prevailing price at the depot of the assessee at the time of transfer to the depot. There is not finding in impugned order that the prices prevailing at the depots were lower than those at the factory gate on the relevant date i.e. date of removal. Impugned order granting refund is set aside - Appeals by the Department are allowed

Summary

Issues:
Department's appeal regarding refund claims on excisable goods transferred to depots at lower prices than factory gate sales.

Analysis:
The case involved three appeals by the Department concerning the same respondent, all arising from a common order-in-appeal passed by the Commissioner (Appeals). The respondent cleared excisable goods from the factory to depots and also had sales at the factory gate. Initially, they paid duty based on factory gate prices for transfers to depots but later claimed refunds due to lower prices at the depots. The original authority rejected the refund claims, but the Commissioner (Appeals) allowed them, leading to the Department's appeals.

The Department argued that the rejection of refund claims was justified as the respondents failed to prove lower prevailing prices at the depots during transfers. They cited legal precedents to support their position. On the other hand, the respondent contended that the assessable value for goods transferred to depots should be based on depot sale prices as per Valuation Rules, not factory gate prices. They referenced relevant circulars and instructions to support their argument.

Upon consideration, the Tribunal found that the respondent's claim for lower prices at depots contradicted the scheme of valuation under Section 4 and related rules. The valuation should be based on prices at the time and place of removal, with adjustments for nearest available prices if necessary. The Tribunal noted the absence of evidence supporting lower depot prices during transfers. The original authority's findings were upheld, emphasizing that the appellant should have paid duty based on depot prices at the time of clearance.

Consequently, the Tribunal set aside the Commissioner (Appeals) order and reinstated the Order-in-Original by the original authority, allowing the Department's appeals.