2018 (12) TMI 1107 - AT - Central Excise

Valuation - stock transfers to depots at the prices prevalent on such date at the depots - goods are partly sold at the factory gate and partly stock transferred to depots - Section 4 read with Rule 4 of the Central Excise Valuation Rules, 1975 - Revenue has taken the view that duty is required to be paid only at the highest such price charged to individual customer. Held that - In the present case, there is a price charged on any given date from individual buyers, but at the same time at the same date, the lower prices are charged to different customers with whom the appellant has contracted prices, keeping in view the volume of business, promptness of payment etc. It appears to us that each contract price can be considered as applicable to a particular class of buyers. A perusal of the invoices issued at the factory gate in respect of goods meant for supply at contracted prices reveals that, the invoice issued for stock transfer invariably indicates the name of the customer and the contract price. On subsequent sale at the depot, the depot invoice indicates the very same price. In view of the above we are of the view that the appellant has discharged duty for such goods transferred to depot appropriately. Appeal dismissed - decided against Revenue.

Summary

Issues Involved:
Dispute over duty payment for stock transfers to depots based on prices prevalent at the time of clearance from the factory gate.

Analysis:
The appeal was filed against an Order-in-Original related to duty payment for stock transfers to depots during a specific period. The Revenue claimed that duty should be paid based on prices prevalent at the depots at the time of clearance, citing Section 4 with Rule 4 of the Central Excise Valuation Rules, 1975. The adjudicating authority had dropped the demand, leading to the Revenue's appeal.

Revenue's Case:
The Revenue argued that duty should be paid at prices prevailing at the depots during clearances, emphasizing the need to pay duty at prices similar to those at the depots. They referred to a Tribunal decision supporting this stance and highlighted the relevant provisions of Section 4 and Rule 4.

Respondent's Defense:
The respondent contended that duty payment was in line with the law, citing Section 4(1)(a) regarding normal prices and different prices for various classes of buyers. They justified paying duty at lower contract prices for specific buyers, as reflected in invoices, and argued that each contract price could be considered for a particular class of buyers.

Judgment and Analysis:
The Tribunal examined Section 4, defining depots as distinct from the factory gate, where duty is paid at the time of clearance. It noted the existence of multiple prices for goods sold from depots, with different prices for individual and contract customers. The Tribunal found that contract prices could be considered for specific classes of buyers, as reflected in invoices, and upheld the respondent's duty payment approach. Consequently, the appeal by the Revenue was rejected, affirming the impugned order.

This detailed analysis highlights the legal interpretation, arguments presented by both sides, and the Tribunal's reasoning leading to the judgment's conclusion.