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2014 (9) TMI 292 - BOMBAY HIGH COURTDetermination of assessable value - normal value - change in sales pattern - Held that:- Section 4 lays down the manner in which the valuation of the excisable goods for the purposes of charging duty of excise shall be made. Clause (a) of sub-section (1) of Section 4 of the said Act of 1944 provides that when the goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale, the normal price thereof shall be the value of excisable goods for charging of duty of excise. Clause (b) thereof is applicable when normal price of such goods is not ascertainable for the reason that such goods are not sold or for any other reason. In such cases, it provided in clause (b) that the value for the purposes of charging duty of excise will be nearest ascertainable equivalent thereof determined in such manner as may be prescribed. The Valuation Rules of 1975 provide for determination of the ascertainable equivalent of value in terms of Clause (b) of sub-section (1) of Section 4 of the said Act of 1944. It appears that after the order of the Appellate Authority, a notice of review was issued by the Union of India which was transferred to the CEGAT. The CEGAT decided the matter by its judgment and order dated 29th November, 1986. The CEGAT referred to the original notice dated 15th October, 1976 in which the Assistant Collector had mentioned in the annexure that the sales were made by the first Petitioner in retail. Therefore, the CEGAT held that the finding of the Assistant Collector that there existed a wholesale price and, therefore, assessable value has to be determined in terms of Clause (a) of sub-section (1) of Section 4 of the said Act of 1944 was rightly set aside by the Appellate Authority. Quashing of SCN - Invocation of principle of res judicata - Held that:- The impugned show cause notice proceeds on the footing that subsequently there is a change in the pattern of sales. If that be so, the principles of res judicata will have no application. Moreover, the finding of CEGAT is on the basis of consideration of the invoices for the relevant period which were produced before it. The learned Senior Counsel appearing for the Petitioners submitted that neither the Department has proved that there was a change in the pattern nor the Petitioners have been called upon to produce the material before this Court. However, all this is a matter of adjudication after reply to the show cause notice is given. The show cause notice specifically makes factual allegations regarding change of pattern of sales. The principles of res judicata cannot be applicable as a change in pattern of sales is alleged. Therefore, we are of the considered view that by invoking principles of res judicata, the show cause notice cannot be quashed. - Decided against assessee.
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