1997 (9) TMI 219 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty imposed by the Collector of Central Excise under challenge.
2. Dispute regarding the collection of extra amounts, commission, and higher prices.
3. Correlation of extra payments with specific invoices.
4. Includibility of commission in the assessable value.
5. Collection of higher prices.

Analysis:
The judgment pertains to an appeal challenging the Order-in-Original passed by the Collector of Central Excise, confirming duty demand and imposing a penalty. The appellant, engaged in the manufacture of figured glass, was paying duty based on approved assessable value. The dispute arose from the period 1981-1984, where it was alleged that the appellant collected extra amounts, commissions, and sold items at higher prices. The show cause notice detailed these allegations, leading to a demand of Rs. 33,65,568.23, later reduced to Rs. 4,10,393.47, relating to the three elements mentioned.

A significant part of the demand was based on the claim that the appellant received higher amounts from specific buyers in North India during the relevant period. The appellant argued that the extra amounts were not collected, citing the practice of customers making part payments as per convenience, resulting in running accounts. The adjudicating authority found it difficult to correlate the alleged extra payments with specific invoices, leading to the belief that the amounts were received as additional consideration. The appellant contested this finding, emphasizing the running accounts maintained between the manufacturer and buyers.

The learned Counsel for the appellant presented ledgers and journals to demonstrate that invoices were not paid in full at once, with running accounts showing debit or credit balances. Reference to invoice numbers in debit entries was highlighted, suggesting the possibility of correlating payments and invoices over a period. The Tribunal agreed that a fresh examination was necessary to determine the existence of extra payments, emphasizing the need for active cooperation from the appellant in this correlation exercise.

Another dispute revolved around the inclusion of commission in the assessable value and the collection of higher prices. Given the decision to remand the case for a fresh review regarding the correlation of payments and invoices, the Tribunal suggested reevaluating these aspects as well. Consequently, the impugned order was set aside, and the case was remanded to the adjudicating authority for a fresh decision, ensuring the appellant's reasonable opportunity to assist in the correlation process and a chance for a personal hearing. Ultimately, the appeal was allowed.