1989 (9) TMI 236 - AT - Central Excise

Summary

Issues Involved:
1. Maintainability of the appeals.
2. Entitlement to reduce the assessable value based on Modvat credit.
3. Determination of assessable value under Section 4 of the Central Excise Act.
4. Procedure for revising the price list under Rule 173C of the Central Excise Rules.

Summary:

1. Maintainability of the Appeals:
The respondents raised a preliminary objection regarding the maintainability of the appeals, arguing that the order of the Collector (Appeals) had become final as no appeal was filed against it by the department. The Tribunal overruled this objection, stating that the Tribunal could still examine the merits of the present appeals despite the earlier order being non-est.

2. Entitlement to Reduce Assessable Value Based on Modvat Credit:
The main contention was whether the respondents could reduce the assessable value by 8% due to Modvat credit. The SDR argued that Modvat credit should not result in the reduction of assessable value, as it is meant for payment of duty on final products and not for reducing the assessable value. The respondents argued that the revised price lists, reflecting the Modvat benefit, should determine the assessable value.

3. Determination of Assessable Value Under Section 4:
The Tribunal examined Section 4 of the Central Excise Act, which provides for the valuation of excisable goods. The assessable value is the price at which goods are sold in the wholesale trade, and it can vary based on different classes of buyers or prices fixed under any law. The Tribunal emphasized that Modvat credit does not directly affect the assessable value, which must be determined solely under Section 4.

4. Procedure for Revising the Price List Under Rule 173C:
The Tribunal highlighted Rule 173C of the Central Excise Rules, which requires manufacturers to file a price list with the proper officer and obtain prior approval for any amendments that lower the existing value of goods. The Tribunal noted that any modification or revision of the price list is prospective and cannot be applied retrospectively.

Conclusion:
The Tribunal concluded that the assessable value cannot be automatically reduced due to Modvat credit. The respondents' claim that the reduction in assessable value was based on a letter from the Railways was not accepted due to the absence of original contracts and relevant terms. The Tribunal directed the Asstt. Collector to re-examine the terms of the original contract and determine if the rate could be altered retrospectively or by a letter. The appeals were allowed, and the matter was remanded to the Asstt. Collector for disposal according to law.