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TMI Blog2013 (4) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... that - The adjudicating authority is directed to verify the calculations if any submitted by the appellants within 30 days and re-calculate the liability to ensure that demand corresponds to the quantity of goods cleared from the factory during the relevant period and based on prices at which goods were billed by SVA and JKA taking the prices of SVA and JKA as cum-duty price. In the price at the premises of consignment agent becomes relevant only from 28-09-96 when the definition of place of removal in section 4 of Central Excise Act was amended. The contention of Revenue is that the goods sold through consignment agent was BHC 50% in drum packing and such goods in the same packing was not being sold at the factory gate. I also find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt agent namely M/s P.L. Agro Tech (PLAT). The case of Revenue is that the two distributors SVA and JKA were fictitious firms and the price at which goods were shown to be sold by these firms should be adopted for valuation of the goods. In the case of sale through consignment agent the argument is that the goods were being sold for the first time only by the consignment agent and the price at which consignment agent sold the goods less admissible deductions should be the assessable value rather than the value adopted for stock transfer. After proceedings in first appeal there is a confirmed demand of Rs. 1,98,236/- for the period April 1994 to Nov 1996, against the appellant along with appropriate interest. There are also penalties of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y SVPPL but invoices are raised by SVA 3.2 Facts relied upon in the case of JKA (a) JKA is acting as a sole selling agent from 01-04-96; (b) The Constitution of JKA is almost the same as that of SVA except that one partner in SVA changed; (c) No amount is invested by JKA in its business (d) The administrative office of the JKA is the same as the administrative office of SVPPL. JKA did not pay any rent to SVPPL. (e) Goods were being further sold in the same transport vehicle on the same day as the goods were shown to be purchased by JKA; (f) JKA did not pay any transportation charges for delivery of the goods at their place (g) The day to day expenses of JKA was paid by SVVPL and debited in the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n JKA and SVPPL were usual commercial terms. 5. They also submit that even if the legal arguments of Revenue is taken as correct the quantum of duty calculated is not proper because the sale prices adopted for working out differential duty is not correct in Annexure-III because price per Metric Ton for the goods for all unit packing is taken as uniform whereas actually the price per ton depended on the contents in each package. 6. In the case of sales through PLAT the argument raised is that till 27-09-96 the value of similar goods at factory gate was applicable for assessment to goods cleared to a consignment agent and therefore Revenue has erred in applying the prices at Hassan for charging duty of goods removed from factory at Salem. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to suppress the value on which excise duty was to be paid. These distributors have no separate establishment, no staff and no activity other than raising parallel invoices. Further there is free flow of funds between the two entities. So it is obvious that the firms are set up for reducing excise duty incidence and to give financial gain of close relatives of the Directors of the Company. The sales tax rate on the product was 3.45% as seen from the annexure to SCN, much lower than excise duty rate of 10%. The parties concerned stand to gain by paying 3.45% sales tax rather than 10% excise duty. So the explanation that they were paying sales tax on both sales is hardly convincing as a reason to adjudge excise duty has been correctly pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at this stage. The appellants may submit its calculations within thirty days of receipt of such documents to the adjudicating authority for verification. When such calculation is submitted the benefit of cum-duty price also may be claimed by SVPPL. 12. The adjudicating authority is directed to verify the calculations if any submitted by the appellants within 30 days and re-calculate the liability to ensure that demand corresponds to the quantity of goods cleared from the factory during the relevant period and based on prices at which goods were billed by SVA and JKA taking the prices of SVA and JKA as cum-duty price. 13. In the case of sales through consignment agents it is noticed that the appellants is contesting that the price at t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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