1992 (3) TMI 207 - AT - Central Excise

Issues Involved:
1. Assessable value of PVC resin sold through consignment agents.
2. Applicability of Part II price lists under Section 4(1)(a) of the Central Excises & Salt Act, 1944.
3. Determination of normal price under Section 4(1)(a).
4. Classification of buyers under Section 4(1)(a) and its proviso.
5. Legality of penalties imposed.

Detailed Analysis:

1. Assessable Value of PVC Resin Sold Through Consignment Agents
The primary issue is whether the price at which PVC resin is sold through consignment agents can be determined based on the wholesale price approved under Part II at the factory gate to industrial consumers. The appellants argued that the price at the factory gate should be the determining factor for the assessable value, even for sales through consignment agents. The Tribunal held that the price approved under Part II for industrial consumers at the factory gate should be the normal price under Section 4(1)(a) for sales to industrial consumers through consignment agents. However, this price cannot be used for sales to buyers other than industrial consumers.

2. Applicability of Part II Price Lists Under Section 4(1)(a) of the Central Excises & Salt Act, 1944
The appellants filed price lists under Part II, which were approved. The Collector argued that since the price lists were under Part II, they could not be considered as ex-factory prices under Section 4(1)(a). The Tribunal clarified that the filing of price lists under different parts (Part I, II, etc.) is for administrative convenience and does not affect the determination of the normal price under Section 4(1)(a). Therefore, the price approved under Part II can be treated as the normal price if it meets the conditions of Section 4(1)(a).

3. Determination of Normal Price Under Section 4(1)(a)
Section 4(1)(a) defines the normal price as the price at which goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade, where the buyer is not a related person, and the price is the sole consideration for the sale. The Tribunal emphasized that the assessable value should be the normal price at the factory gate for sales in wholesale trade to industrial consumers. The Tribunal held that the price approved under Part II for industrial consumers at the factory gate should be treated as the normal price under Section 4(1)(a).

4. Classification of Buyers Under Section 4(1)(a) and Its Proviso
The proviso to Section 4(1)(a) states that if goods are sold at different prices to different classes of buyers, each such price shall be deemed to be the normal price for that class of buyers. The Tribunal noted that industrial consumers are a distinct class of buyers. Therefore, the price at the factory gate for industrial consumers should be the normal price for that class. However, for sales to other classes of buyers through consignment agents, the price charged by the consignment agents should be considered.

5. Legality of Penalties Imposed
The Tribunal remanded the matter to the Collector to re-determine the assessable value and reconsider the justification for the penalties imposed. The Tribunal suggested that the issue involved is a pure question of law, and the Collector should consider this while deciding on the penalties.

Conclusion
The appeals were remanded to the Collector for de novo consideration to re-determine the assessable value in light of the Tribunal's observations. The Tribunal clarified that the price approved under Part II for industrial consumers at the factory gate should be the normal price under Section 4(1)(a) for sales to industrial consumers through consignment agents. However, this price cannot be used for sales to other classes of buyers. The Collector was also directed to reconsider the penalties imposed after re-determining the assessable value.

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