1996 (8) TMI 228 - AT - Central Excise

Summary

Issues:
Department's appeal against the Order-in-Appeal setting aside demands confirmed by Assistant Collector regarding assessable value determination based on sales to a specific buyer.

Analysis:
The Department raised demands against the Respondents, alleging that they supplied all manufactured items to a specific buyer in loose and unpacked condition, leading to a dispute over the assessable value. The Collector (Appeals) set aside the demands, stating that the essential element of mutuality of interest between the parties was missing, thereby dropping the demand.

The Department argued that supplying around 90% of products to the specific buyer in loose condition within the factory compound established them as a favored buyer. They contended that glass and glassware require packing for marketability, which the buyer undertook to evade duty.

The Respondent's advocate referred to a CBEC letter stating that glass and glassware can be sold without packing, citing a previous case where the High Court ruled that packing charges need not be included in the assessable value. The advocate emphasized that the issue had been settled judicially, and there was no evidence of financial flow between the parties.

The Department challenged the order on the basis that the buyer was related, but the absence of discriminatory treatment towards the buyer indicated they were not favored. They noted that the sale in bulk in unpacked condition had been accepted previously by the Board, High Court, and Supreme Court in the Appellants' case, supporting the Respondents' position.

Ultimately, the Tribunal rejected the Department's appeal, stating that the contentions must align with the Show Cause Notice, and since the order was in line with judicial precedents and the specific circumstances, the appeal lacked merit and was dismissed.