1997 (3) TMI 241 - AT - Central Excise

Summary

Issues: Department appeal against order of Collector (A) regarding assessable value determination for diverted goods under notification 167/79.

The judgment pertains to a departmental appeal against an order issued by the Collector (A) of Madras concerning the determination of the assessable value for certain tractor parts diverted by the respondents for spares market and lab test under notification 167/79. The department contended that the assessable value should have been calculated based on the price at which the goods were sold and removed from the factory, as per Section 4 of the Act emphasizing the normal price at which goods are sold by the assessee in wholesale trade. The department argued that the order confirming the demand for differential duty was valid and the Collector (Appeals) erred in setting it aside.

The department further argued that the Collector (Appeals) had relied on a previous decision that was not binding in the present case, as it involved a different party. The respondents' advocate, however, pointed out that the A.C. should have followed the earlier order of the Collector (Appeals) concerning the same appellant and issue. Additionally, the advocate highlighted that the assessable value should be determined at the time of clearance of goods from the manufacturer's premises, as indicated in AR 3, citing a Tribunal's order in the case of H.M.T. Limited.

Upon considering the submissions, the Tribunal emphasized that the valuation of excisable goods for duty purposes must adhere to Section 4 of the Act, where the assessable value is deemed to be the normal price at which goods are sold by the assessee in wholesale trade. Referring to the case of H.M.T. Limited, the Tribunal reiterated that the value declared by the manufacturer forms the basis for assessment, not the subsequent sale price. The Tribunal also referenced judgments in cases involving M/s. Tata Engineering and Locomotives Ltd. and M/s. Ashok Leyland Ltd. The Tribunal concluded that the principles established in the case of H.M.T. Limited were applicable in the present matter and dismissed the department's appeal accordingly.