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TMI Blog2006 (7) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... pots at various places. On a few occasions, the goods were sold on ex-factory price and delivery basis. Enquiries made revealed that there was no real normal price in terms of Section 4(1) of the Central Excise Act, 1944 in the sense that the assessee's ex-factory sales were artificial and there were not sales, to satisfy the conditions of Section 4(1) of the Central Excise Act, 1944. (b) It appeared since the assessee has a number of Depots across the country and all their dealers placed their orders on and got delivery from such Depots only and it was only to a negligible number of buyers, the goods were supplied ex-factory, at ex-factory prices. Such ex-factory prices, even after loading, transportation and all other taxes, were considerably lower than as compared to the ex-depot prices. Ex-factory prices therefore were alleged to be contrived. (c) Since the dealers had no real access to the ex-factory procurement and orders were required to be ex-depot and only on stray occasions sales were ex-factory basis, these sales and shipping in such cases was handled by the assessee, on behalf of their dealers who bore the cost upon being billed by the assessee. It appeared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Tribunal was dismissed by the Hon'ble Supreme Court in 2004 (163) E.L.T. A65 (Commissioner v. Bharati Telecom Ltd. by holding as under :- "In view of the decision of this Court in Indian Oxygen Ltd. v. Collector of Central Excise reported in 1988 (36) E.L.T. 723 (S.C.) coupled with the findings of the Tribunal that the Revenue had admitted that there were factory gate sales and there was no evidence to show that the factory gate sales were not genuine and factory price was ascertainable, these appeals must be dismissed. The appeals are dismissed but without any order as to costs." (ii) 2003 (151) E.L.T. 168 [Bio Foods (P) Ltd. v. Commissioner of Central Excise] Valuation (Central Excise) - Freight and special packing charges not includible in the assessable value irrespective of whether the appellants had collected these amounts in all cases or not - Appellants, contention that they sell the goods both at the factory gate and from depots remaining unchallenged, orders demanding duty on the differential amount between the amounts realised under these two headings and amount actually spent being incorrect, set aside - Section 4 of Central Excise Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory sales after allowing admissible deductions - So long as the existing ex-factory price is not shown to be rigged or influenced by extra commercial considerations, that price has to be taken as the normal price and assessment to duty must be made on that basis - Quantum of goods sold by a manufacturer on wholesale basis at the factory gate is entirely irrelevant - Section 4 of Central Excise Act, 1944. [para 4] (vi) 2002 (147) E.L.T. 1166 (Collector of Central Excise v. Falcon Tyres Ltd.) Valuation (Central Excise) - 2% sales effected at factory gate whereas 98% sales effected through depots - Ex-factory price to be taken as basis in determining value even with reference to depot sales, ex-factory price being ascertainable - Section 4 of Central Excise Act, 1944. [1988 (36) E.L.T. 723 (S.C.) relied on]. [para 4] (vii) 1991 (52) E.L.T. 142 (D.C.W. Limited v. Collector of Central Excise) - In this decision, in Paragraph 10, the Hon'ble Tribunal held as under:- "10. Quantum of goods sold by a manufacturer on wholesale basis is entirely irrelevant. The fact that the said sale may be few or scanty does not alter the true position. (A.K. Roy & other v. Voltas Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sheet Glass Works Ltd. v. Collector of Central Excise) Valuation (Central Excise) - Goods sold partly through ex-factory and partly through depots - Ex-factory wholesale prices where available, they constitute the basis for assessment of all the goods to central excise duty -Section 4 of the Central Excise Act, 1944. (xiii) 1994 (74) E.L.T. 528 (Sarada Plywood Industries Ltd. v. Union of India) Valuation (Central Excise) - Representative character of ex-factory prices - 5% to 15% goods sold in wholesale at factory gate and remaining 85% to 95% goods sold from depots - No evidence adduced by Revenue to show that ex-factory sales were not at arm's length or that price was unreasonably low - Ex-factory price to form the basis for determination of assessable value for entire quantity of goods cleared in accordance with Section 4(1)(a) of Central Excises and Salt Act, 944 - Relative quantum of goods sold ex-factory immaterial. (xiv) 1992 (60) E.L.T. 256 (Merinoply & Chemicals Ltd. v. Collector of Central Excise) Valuation (Central Excise) - Goods partly sold from depots and partly from factory - Ex-factory price ascertainable - Ex-factory price to be the assessable value under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of law. In this view of the matter we find no justification in this appeal to upset the orders of the Commissioner.
6. The plea of no cross-examination granted to the various dealers would not help the appellant case since the examination of the dealers would not bring out any material which would not be in the possession of the appellant themselves to explain as to why their ex-factory prices remain static. Since we are not upholding and applying the ex-factory prices, as we find them contravened and not normal price as envisaged under Section 4(1), we find no reason to disturb the Commissioners orders.
In view, of the findings arrived at, we would confirm the duty demand. However, we find that for earlier period the assessee has a favourable order on their ex-factory prices. Therefore, we find that the penalty, imposed, in the facts of this case was not called for. We would set aside the same and would order confirmation of the duty demands as made by the ld. Commissioner. Appeal allowed only as regards the penalty imposed, which is to be set aside. The duty demands are confirmed. Appeal disposed of accordingly.
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