1998 (4) TMI 307 - AT - Customs

Summary

Issues:
Interpretation of Notification 77/83-C.E., dated 1-3-1983 regarding the computation of aggregate value of clearances.
Consideration of escalated prices received by the appellants in a particular year for computing aggregate value of clearances.
Validity of the practice followed by the appellants in availing benefits under the notification based on the date of actual removal of goods.

Analysis:
The case involved the appellants, manufacturers of RCC spun pipes, who supplied 99% of their products to Government Departments under a rate contract with the PWD of the Government of Tripura. The rate contract specified the basic price and variations based on raw material prices, with provisions for payment in advance for consignments. The appellants historically calculated the aggregate value of clearances in a financial year based on the date of actual removal of goods, even if they had received payments in advance, including escalated prices. However, the authorities contended that escalated prices should be accounted for in the year received, contrary to the appellants' practice.

Upon hearing both sides, the Tribunal noted that the adjudicating authority's reasoning disregarded the terms of the rate contract, which allowed for escalated prices to be received in advance based on pre-removal inspections and consignment delivery. The Tribunal emphasized that the duty is payable at the time of clearance from the factory, as per Rule 9 and Rule 49, regardless of when payments are received. Therefore, the value of clearances under the notification should align with the date of actual removal of goods, irrespective of pre-received payments, basic or escalated.

In conclusion, the Tribunal set aside the lower order and ruled in favor of the appellants, recognizing the validity of their practice under the rate contract and allowing the appeal with consequential relief. The judgment highlighted the importance of adhering to contractual terms and the legal framework for duty payment, emphasizing the significance of the date of actual removal of goods in determining the aggregate value of clearances for duty computation purposes.