1997 (6) TMI 87 - AT - Central Excise

Summary

Issues:
1. Dispute regarding goods supplied to M/s. Central Coalfields Limited under a specific agreement.
2. Inclusion of expenses for pre-despatch inspection in the assessable value.
3. Imposition of penalty in relation to the escalated price covered by debit bills.

Analysis:
1. The appeal concerned a dispute regarding goods supplied to M/s. Central Coalfields Limited under a specific agreement from 1982 to 1986. The Collector of Central Excise, Patna had confirmed a demand for a differential duty and imposed a penalty based on certain findings. The appellant challenged this order, leading to the current appeal.

2. The first contention raised was regarding the inclusion of expenses for pre-despatch inspection in the assessable value. The appellant argued that since the inspection was at the option of the buyers, the inspection fees should not be included. The Tribunal agreed with the appellant, noting that the inspection was conducted at the buyer's option and not by the manufacturer, thus the inspection fee should not be part of the assessable value.

3. The next issue involved the escalated price covered by debit bills raised by the appellant on the buyers. The Tribunal observed that the price escalation clause in the agreement did not require intervention from an outside authority for price variations. However, discrepancies were found in the acceptance of debit bills by buyers, indicating errors in billing. The Tribunal directed the adjudicating authority to reexamine these instances to determine if the assessable value should be adjusted accordingly.

4. Regarding the penalty imposed, the Tribunal noted that the penalty was based on both the pre-despatch inspection charges and the escalated price issue. The Tribunal found that the appellant's belief that duty was payable only upon final settlement of prices was not supported by evidence, especially since part payments of escalated prices were received without duty payment. The Tribunal agreed with the imposition of the penalty and remanded the case for a fresh quantification of penalty and duty considering the errors in debit bills.

5. Ultimately, the Tribunal allowed the appeal by setting aside the inclusion of pre-despatch inspection charges in the assessable value and directing a reevaluation of the escalated price issue based on errors in debit bills. The adjudicating authority was instructed to quantify the penalty afresh in light of the directions provided.

This detailed analysis of the judgment from the Appellate Tribunal CEGAT, New Delhi addressed the issues raised by the appellant and provided a comprehensive review of the findings and directions given by the Tribunal.