1993 (4) TMI 143 - AT - Central Excise

Summary

Issues:
1. Interpretation of pricing methodology for central excise duty on electric table fans.
2. Consideration of undue hardship in pre-deposit of duty and penalty amount.
3. Application of Supreme Court and Tribunal precedents in determining pricing for raw materials.

Analysis:
The appeal before the Appellate Tribunal CEGAT, New Delhi involved a challenge by M/s. Surya Electronic Construction, Varanasi against an Order passed by the Collector of Central Excise, Allahabad. The appellant contended that the Revenue authorities had incorrectly adopted the brand name price for electric table fans sold to Jay Engg. Works, citing a Supreme Court decision in support of their argument. Additionally, the appellant purchased raw materials from Jay Engg. Works at arm's length, emphasizing that the price paid for the raw materials was duly accounted for in their invoices. The appellant also highlighted financial difficulties, stating that depositing the duty amount and penalty would cause undue hardship. On the other hand, the respondent argued that the price at which the goods were sold by Jay Engg. Works should be adopted, as the raw materials were supplied by the purchaser for the fans.

During the hearing, it was revealed that the appellant had paid the price for raw materials purchased from Jay Engg. Works on a principal-to-principal basis. The tribunal considered the closure of the appellant's factory since December 1991 and the financial constraints faced by the appellant. Referring to the decision in the case of Spencer & Co. Ltd., Madras, followed by the Tribunal in Sonodyne Television Company v. Collector of Central Excise, Calcutta, the tribunal found that requiring the appellant to deposit the duty amount and penalty would result in undue hardship. Consequently, the tribunal allowed the stay application, dispensing with the pre-deposit requirement and ordering that revenue authorities refrain from pursuing recovery proceedings during the appeal's pendency.

In conclusion, the tribunal's decision focused on the interpretation of pricing methodology for central excise duty, consideration of undue hardship in pre-deposit requirements, and application of relevant Supreme Court and Tribunal precedents in determining the pricing of raw materials in the case at hand.