2000 (5) TMI 855 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty against the appellant and imposition of penalty.
2. Dispute regarding pricing of goods supplied under an extended contract.

Analysis:

Issue 1:
The appellate tribunal confirmed a duty of Rs. 63,704 against the appellant and imposed a penalty of Rs. 500. The appellant contended that they entered into a contract for the supply of explosives at an agreed price with M/s. Seenappa Satty and Sons. The contract expired, but the buyers extended it for more quantities at the same price. The authorities below accepted the earlier price list but increased the assessable value for subsequent supplies based on normal assessable value under section 4(1)(a). The appellant argued that the extension letter was not disclosed to the revenue authorities before the show cause notice. Reference was made to a larger Bench decision where a similar situation was dealt with favorably towards the appellant.

Issue 2:
The dispute revolved around the pricing of goods supplied under the extended contract period. The Revenue authorities contended that the extension letter for additional quantities at the same price was not disclosed earlier. They distinguished a previous case by highlighting that in the current situation, the extended quantity was not part of the original contract. The appellate tribunal noted that the genuineness of the extension letter was not doubted by the Revenue. The main contention was the late filing of the extension letter and whether it justified denying the appellant the benefit of the contract price. The tribunal found no evidence to suggest that the price charged by the appellant was not the actual price received from customers. Consequently, the tribunal set aside the impugned order and allowed the appeal, emphasizing that the late filing of the extension letter should not be a reason to reject the contract price and adopt a normal assessable value under section 4(1)(a).

In conclusion, the appellate tribunal ruled in favor of the appellant, setting aside the duty confirmation and penalty imposition. The judgment highlighted the importance of honoring contract prices, even in cases of late disclosure, as long as the actual price recovered from customers aligns with the contract terms.