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TMI Blog1992 (3) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... ial establishments etc. against specific contracts; and (3) Sales through appellants depots and consignment agents situated at various places in the country. The dispute relates to the assessable value of PVC resin. In respect of PVC resin, the appellants filed price lists under Part II, which was approved. While so, a show cause notice was issued proposing to recover the duty of Rs. 7,99,792.2 and Rs. 10,021118.12 and proposing to impose penalty on the ground that the appellants have not disclosed the excess realisation over and above the commission paid to the consignment agents. According to the Department, the excess realisation is includible in the assessable value of the PVC resin. The appellants in their reply stated inter alia that: In this regard, we would also like to point out that even though we are effecting sales through our consignment agents we also have sales to direct consumers at the factory gate at more or less the same price at which the goods have been cleared for sale by the consignment agents. You will appreciate that under Section 4(1) (a) of the Act, the value on which excise duty will have to be paid will be deemed to be the normal price thereof i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factory gate in wholesale, should be the determining factor. While determining the assessable value in respect of sales through consignment agents. He pointed out that during June, 1985 to November, 1987 they have manufactured and cleared 51028 MT of PVC resin out of which 18365 MT, constituting 26.19% were cleared by direct sales to industrial consumers under Part II price list. About 22,270 tonnes constituting 43.64% of the production was sold through depots under Part II price list. Another quantity of 15,393 MT was sold through consignment agents and that constitutes about 30.1%. Therefore, as long as there are wholesale sales at the factory gate to the industrial consumers that should be the basis for determining the assessable value under Section 4(l)(a). Industrial consumers being a class of buyers the wholesale price at the factory gate to the industrial consumers is the price under Section 4(l)(a) of the Act and it shall have the representative character of the normal price. In support of the contention he relied upon the following judgments: U.O.I. v. Indian Oxygen [1988 (36) E.L.T. 723 (SC)] Fewer India v. C.C.E. [1991 (52) E.L.T. 460 (Tri.) = 1991 (33) ECR 164 (Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time and place of removal where the buyer is not a related person and price is the sole consideration for the sale, it represents the normal price for determining the assessable value. 9. The expression wholesale trade is defined under Section 4(e) which reads as follows: Section 4(e). - Wholesale trade means sales to dealers, industrial consumers, Government, local authorities and other buyers, who or which purchase their requirements otherwise than in retail." The expression contemplates different classes of buyers namely, dealers, industrial consumers, Government, local bodies and other buyers. Therefore, industrial consumers are a class of buyers. 10. The next provision which is relevant is the first proviso to Section 4(l)(a) which reads as follows : Provided that (i) where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall, subject to the existence of the other circumstances specified in clause (a) be deemed to be the normal price of such goods in relation to each such class of buyers". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce lists of goods assessable ad valorem and the price lists are prescribed by the Central Board of Excise Customs. These price lists are under Part I to Part VII. Part I is a proforma for excisable goods for sale by the assessee to the buyers [not being related persons in the course of wholesale trade under Section 4(l)(a)]; Part II is a proforma for excisable goods for sale to class of buyers under the proviso (i) of Section 4(l)(a); Part III is the proforma for excisable goods for sale on the basis of the price or the maximum price fixed under any law. It is a price list under Section 4(l)(a), proviso (ii); Part IV is the proforma of the price list for excisable goods for sale through or to a related person; Part V is the proforma for excisable goods for sale in retail; Part VI is the proforma of the price list for the goods consumed captively; Part VII is the proforma for excisable goods not covered by any of the above price lists. 14. The price lists are filed for the purpose of making assessment and for the convenience of the Department as well as the assessee to ascertain the price of the manufacture, clearance, deductions claimed etc. The filing of a price list under a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CCE [1989 (40) E.L.T. 147 (Tri.)] held that the goods cleared at the factory gate for consignment agents are subject to the levy of Central Excise duty at the normal price. 19. It is not clear whether the demand relates to duty payable on sales through consignment agents to industrial consumers alone or includes duty payable on sales through consignment agents to buyers other than industrial consumers. We, therefore, remand the matter to the Collector to re-determine the assessable value in the light of the above observations. As regards the penalty the Collector may consider whether there is any justification in levying the penalty after re-determining the assessable value having regard to the fact that the issue involved is the pure question of law. 20. Hence, the appeals are thus remanded to the Collector for de novo consideration. dated 25-3-1992 Sd/- (S.V.Maruthi) Member (J) Sd/ (P.C.Jain) Member (T) 21. [Assent per: P.C. Jain, Member (T)]. -I have carefully perused the order proposed by the learned Sister Ms. S.V. Maruthi, Judicial Member and I agree with her observations in paras 16 and 17 of the proposed order. I would, however, like to add a few w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been the same as the price charged on sale by the appellants to their buyers at the factory gate, the proposition put forward by the learned advocate would have been acceptable but the fact remains that the prices charged by the consignment agents from their different buyers are at a higher level than what has been charged in respect of sales to industrial consumers; the latter price cannot form the basis of charging duty in respect of removals to the consignment agents. It is only the price in respect of industrial consumers alone that is established at the factory gate under Section 4(l)(a) by virtue of sales by the appellants to the industrial consumers. The price to other classes of buyers was not established and the sales to such other classes of buyers has been made for the first time by the consignment agents at a higher level. Therefore, the 1st proviso to Section 4 comes into play at once inasmuch as there are different prices of the assessee for different classes of buyers. Hence, the prices charged by the consignment agents of the appellants to Trading Corporations, which form a class different from that of industrial consumers, would form the basis of value in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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