2007 (2) TMI 393 - AT - Central Excise

Summary

Issues:
1. Dropping of demand of duty on goods manufactured and sold to a related buyer.
2. Dispute regarding the normal price under Section 4 of the Central Excise Act.
3. Acceptance of the Tribunal's decision in a similar case.
4. Challenge to the Tribunal's decision by the Revenue.
5. Applicability of binding judicial authorities on the valuation dispute.

Analysis:
1. The appeal pertained to the dropping of duty demand on goods manufactured and sold to M/s. BPL Ltd., with the Revenue contesting the dropping of duty. The demand was based on the allegation that the seller and the buyer were related persons, leading to a charge of lesser price, which was not accepted as the normal price under Section 4 of the Central Excise Act due to mutuality of interest. The respondents argued that the transaction was at arm's length and on a principal-to-principal basis, denying any related person status with M/s. BPL Ltd.

2. The dispute revolved around the normal price under Section 4, with the original authority rejecting the assessee's claim and the Ld. Commissioner (Appeals) allowing the appeal based on a similar case involving M/s. BPL Sanyo Utilities & Appliances Ltd. The Ld. Commissioner followed the decision in the previous case, leading to the present appeal by the Revenue challenging the acceptance of the Tribunal's decision in the similar case.

3. The Tribunal's decision in the case of M/s. BPL Sanyo Utilities & Appliances Ltd. was a crucial aspect, with the Revenue arguing that the decision was not final and correct as a civil appeal had been filed and admitted by the Hon'ble Supreme Court. The Ld. Counsel for the respondents, however, was prepared with other binding judicial authorities on the valuation dispute, suggesting that the case could be decided on merits without solely relying on the Tribunal's decision in the BPL Sanyo case.

4. The Tribunal observed that the Ld. Commissioner (Appeals) had based the impugned order solely on the Tribunal's decision in the BPL Sanyo case without discussing the case made by the assessee against the SCN allegations. Citing the Apex Court judgment in UOI v. West Coast Paper Mills Ltd., the Tribunal held that once special leave was granted and appeal admitted, the judgment's correctness was in jeopardy. Therefore, the Tribunal set aside the impugned order, directing the Ld. Commissioner to pass a fresh order considering the case on merits without reference to the Tribunal's decision in the BPL Sanyo case.

5. The appeal was allowed by way of remand, emphasizing the need for a fresh order based on merits and consideration of binding judicial authorities on the issue. The Tribunal pronounced the operative part of the order on 16-2-2007, highlighting the importance of a fair and comprehensive review of the case without undue reliance on previous decisions.