2000 (11) TMI 559 - AT - Central Excise

Summary

Issues:
- Confirmation of demand of duties against the appellant
- Sales through consignment agents leading to differential pricing
- Allegations of flow back of money to the appellant
- Applicability of legal precedents on pricing determination

Confirmation of demand of duties against the appellant:
The judgment pertains to three appeals where duties were confirmed against the appellant totaling Rs. 4,30,771.00 and Rs. 55,806.00 for different periods. The appellant, engaged in manufacturing jute products, sold goods both at the factory gate and through consignment agents across the country. The department alleged that consignment agents sold goods at higher prices than the factory gate prices, adjusting the difference through documents like sale notes. Show cause notices were issued based on these findings, leading to confirmed orders by the adjudicating authority and the appellate authority.

Sales through consignment agents leading to differential pricing:
The appellant argued that the duty demand based on consignment agent sales was unjustified, citing the Supreme Court's decision in Indian Oxygen Ltd. case and a Tribunal decision in CMC (I) Ltd. case. The appellant contended that the factory gate prices, not doubted by the revenue, should be the basis for duty calculation. Additionally, the appellant highlighted the retrospective application of Section 4 amendments extending the place of removal to consignment agents' premises, which the authorities applied in the present case.

Allegations of flow back of money to the appellant:
The Revenue presented evidence showing money flowing back to the appellant through sale notes issued by consignment agents, which the appellant did not rebut. The department justified the duty demand based on this additional flow of money. The Tribunal noted that the appellant did not deny the allegations of issuance of sale notes by consignment agents, indicating a factual basis for the revenue's claims.

Applicability of legal precedents on pricing determination:
The Tribunal analyzed the applicability of the Indian Oxygen Ltd. case and the CMC (I) Ltd. case to the present situation. It was found that unlike those cases, in the current scenario, excess money was flowing back to the manufacturer through consignment agents, making the factory gate price not the sole consideration for the goods. As per Section 4 of the Central Excise Act, the value should be the sole consideration, which was not the case here. Therefore, the Tribunal upheld the duty demands, stating that the precedents cited by the appellant did not apply due to the flow back of money to the manufacturer. The appeals were rejected based on these findings.