2007 (6) TMI 84 - AT - Central Excise

Valuation(Central Excise) Revenue contended that appellant require to value its goods cleared in the bulk quantity to the industrial users as per Rule 4A instead of Rule 4 Held that revenue contention was not correct and valuation as per Rule 4

Summary

Issues: Valuation of clearances under Section 4 and Section 4A of the Central Excise Act; Interpretation of rules regarding retail sale price declaration; Application of circulars and previous tribunal decisions; Legality of Commissioner (Appeals) order; Review process by Committee of Commissioners.

In this case, the appeals were filed by the revenue challenging the Commissioner (Appeals) order regarding the valuation of clearances under Section 4 and Section 4A of the Central Excise Act by a manufacturer of insecticides and pesticides. The revenue authorities contended that clearances to industrial users should also be valued under Section 4A, leading to a differential duty demand. However, the Commissioner (Appeals) accepted the assessee's contention, setting aside the duty demand. The appellant claimed exemption from declaring retail sale prices based on Rule 34 of the Standard of Weights and Measures (Packages Commodity) Rules, 1977, supported by a certificate from Weights and Measures Authorities. The Commissioner (Appeals) also considered a Board circular stating that in cases of doubt, clarification should be sought from the concerned department. Despite these, the revenue insisted on valuation under Section 4.

The Tribunal referred to a similar dispute in a previous case involving white cement sales and held that goods intended for a specific industry could be excluded from Section 4A valuation under Rule 34. The Tribunal emphasized that construction is indeed an industry and supported the appellant's position, citing the Board's circular and a previous tribunal decision. As no appeal was filed against this previous order, it attained finality. The Tribunal found no error in the Commissioner (Appeals) order, rejecting the present appeals. Additionally, the Tribunal noted the provision for the review of orders by a Committee of Commissioners introduced in the Finance Act, 2005, aiming for a qualitative improvement in the review process and to deter frivolous appeals, expressing concern over the routine filing of appeals even under this system.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, emphasizing the importance of following rules and circulars in determining valuation under the Central Excise Act. The case highlights the significance of obtaining clarifications from relevant departments in case of doubt and the need for qualitative improvement in the review process to prevent unnecessary appeals.