1996 (4) TMI 242 - AT - Central Excise

Summary

Issues: Revenue's appeal against order granting exemption under Notification No. 120/75-C.E. based on commercial prices charged by the respondent.

The judgment pertains to an appeal filed by the Revenue challenging an order granting exemption under Notification No. 120/75-C.E. to the respondent, a manufacturer of Leather pickers. The Collector of Central Excise (Appeals), Bombay had held that the prices charged by the respondent were fully commercial, making them eligible for the exemption. The Revenue contended that a specific agreement with a customer influenced the prices, rendering the exemption inapplicable.

The Revenue argued that the goods were sold to a customer under an agreement limiting the customer's profit margin to 12%, suggesting that the prices were influenced by this agreement. The Revenue maintained that the prices in the open market were higher by 12% than the approved value, affecting the eligibility for the exemption under Notification No. 120/75-C.E.

Upon hearing the arguments, the Tribunal considered the exemption notification, which allows exemption to the duty based on the invoice value if the Section 4 value is higher. Referring to a Supreme Court decision, the Tribunal emphasized that if the invoice value reflects the genuine price charged, the exemption cannot be denied based on potential higher values. The Tribunal noted that the Asstt. Collector had confirmed that the prices charged were fully commercial, a finding upheld by the Collector of Central Excise (Appeals), Bombay.

The Tribunal concluded that the agreement stipulating the profit margin for the customer did not render the manufacturer ineligible for the exemption unless it could be proven that the relationship was non-commercial. Given the clear finding that the prices were fully commercial, the Tribunal rejected the Revenue's appeal, finding no grounds to challenge the order-in-appeal. The appeal by the Revenue was dismissed, upholding the original order granting exemption to the respondent based on the commercial prices charged.