2000 (12) TMI 442 - AT - Central Excise

Summary

Issues:
1. Confirmation of demand of duty against the appellants for a specific period.
2. Determination of assessable value for goods sold through different modes.
3. Application of provisions of Section 4(4)(b)(iii) to the case.
4. Consideration of related person status between the appellants and M/s. Hindustan Lever Ltd.
5. Bar on demand by limitation.
6. Imposition of penalty and interest under relevant sections of the Central Excise Act.

Detailed Analysis:
1. The judgment deals with an appeal against the confirmation of a duty demand of Rs. 16,12,512 against the appellants for a specified period. The Commissioner confirmed the demand and imposed a personal penalty on the appellants. The case involved the manufacturing and sale of Sodium Tripoly Phosphate (STPP) by the appellants through various modes.

2. The appellants sold the product from their factory gate to independent wholesale buyers at a uniform price. Additionally, they cleared goods to their depots/consignment agents, determining assessable value by adding transportation costs. They also manufactured STPP on job work basis for M/s. Hindustan Lever Ltd., clearing it at the same assessable value as goods sold to independent buyers.

3. The dispute arose when the adjudicating authority added transportation costs incurred by M/s. Hindustan Lever Ltd. for moving goods from the appellants' factory to their own factory in Calcutta, citing an extension of the 'place of removal' under Section 4. The appellants argued against this application, stating that the goods were not further sold by M/s. Hindustan Lever Ltd., and thus, the provisions were misapplied.

4. The appellants contested the related person status with M/s. Hindustan Lever Ltd., highlighting the absence of mutual interest and citing a Supreme Court case precedent. They argued that the demand was time-barred, asserting no suppression of facts. They also challenged the penalty and interest imposition under relevant sections of the Central Excise Act.

5. The Tribunal analyzed the provisions of Section 4 and concluded that the extended meaning of 'place of removal' did not apply in this case as the transactions between the appellants and M/s. Hindustan Lever Ltd. were complete at the factory gate. The assessable value at the factory gate was deemed appropriate for goods manufactured on job work basis.

6. The Tribunal agreed with the appellants that M/s. Hindustan Lever Ltd. could not be considered related persons and that the demand including freight costs was unjustified. Consequently, the impugned order was set aside, and the appeal was allowed with relief to the appellants. The Tribunal did not address the limitation point due to allowing the appeal on merits.