2001 (9) TMI 428 - AT - Central Excise

Summary

Issues:
1. Determination of the correct valuation of goods sold to employees at reduced rates.
2. Imposition of duty and penalties by the Deputy Commissioner.
3. Appeals filed before the Commissioner (Appeals) Jaipur.
4. Adjudication of differential duty and penalties by the appellate authority.
5. Contention regarding the penalty imposed on the appellant.
6. Decision on the penalty and overall outcome of the appeals.

Analysis:

1. The case involved appeals by M/s. Electrolux Kelvinator Ltd., Alwar against orders passed by the Commissioner (Appeals), Jaipur regarding the valuation of refrigerators sold to employees at reduced rates. The Deputy Commissioner initiated proceedings, emphasizing that the price of excisable goods should reflect the ordinary selling price in wholesale trade. The Deputy Commissioner observed that selling refrigerators to employees at significantly lower prices deviated from the normal price in wholesale trade. The Deputy Commissioner relied on a Tribunal decision related to a similar issue with motorcycles sold to employees at reduced rates.

2. Subsequently, the Deputy Commissioner confirmed the duty amounts for the refrigerators sold to employees and imposed penalties on the appellants. The duty amounts and penalties were upheld by the Commissioner (Appeals) Jaipur in the impugned orders, with a reduction in the penalty amount in one order and setting aside the penalty in the other.

3. During the hearing, the appellants did not dispute the facts but argued that any differential duty should be based on the factory gate sale price deducted from the depot sale price. The Tribunal found no discrepancy in adopting the depot sale price for assessment purposes due to the absence of factory gate sales. However, the Tribunal agreed with setting aside the penalty in one case and applied the same reasoning to the other case.

4. Consequently, the Tribunal set aside the penalty imposed on the appellants but rejected the appeals, maintaining the duty amounts. The appeals failed based on the valuation of goods sold to employees and the penalty issue. The decision highlighted the importance of determining the correct valuation of goods for excise duty purposes and the appropriate application of penalties in such cases.