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2015 (11) TMI 1474 - AT - Central ExciseWaive of pre deposit - Valuation of goods - Section 4(1)(a) - Determination of assessable value - Demand of differential duty - Held that:- In terms of the provisions of Section 4(1)(a) of the Act, where the duty of excise is chargeable on any excisable good with reference to their value, then, on each removal of the goods, such value of the goods shall, in a case where the goods are sold by the assessee for delivery at the time and place of removal, the assessee and the buyers of the goods are not related and the price is sole consideration for sale, be the transaction value. According to clause (b) of Section 4(1), in any other case, including the case where the goods are not sold, the transaction value is to be determined in such manner as prescribed. In this regard, the Central Government has framed Central Excise Valuation (Determination of price of excisable goods) Rules, 2000. Thus, Section 4(1)(b) read with the Valuation Rules becomes applicable only when the transaction value under clause(a) of Section 4(1) is not available. The loss making price cannot be accepted as the normal price of the goods and that too when it is spread over a period of more than five years i.e. w.e.f. January, 2008 and it has to be inferred that the consideration could only be to compete with other manufacturers who are also engaged in the manufacture of the similar goods falling under the same Chapter Heading of CETA, 1985, the existence of extra commercial consideration while fixing the price would not be the ‘normal price’. No prudent businessman would continuously suffer huge loss only to compete market. - there is neither admission by Appellant that they lowered the price to level below the cost of production to penetrate the market nor there any evidence on record to support this allegation. If the Department’s stand is that lower price below the cost of product was to compete with the other manufacturer of comparable cars, that price as discussed above, cannot be held to be influenced by any extra commercial consideration. When the price is fixed keeping in mind the factors of the supply and demand, and also the price on which the competitors are selling the comparable product, the price determined may sometimes be more than the manufacturing cost and profit and sometimes may be less than the manufacturing cost and in the latter cases, it cannot be said that the price is influenced by the extra commercial considerations. Directing the appellant to pre-deposit the entire duty demand confirmed along with interest for compliance with the provisions of Section 35 F would certainly cause undue hardship. Therefore, the requirement of pre-deposit of duty demand, and the interest thereon is, therefore, waived for hearing of the appeal and recovery thereof stayed. - Stay granted.
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