2003 (11) TMI 230 - AT - Central Excise

Summary

Issues: Valuation of rubber foam goods, Duty evasion in sales to related party

In the judgment delivered by the Appellate Tribunal CESTAT, NEW DELHI, the Revenue's appeal was directed against the Order-in-Original passed by the Commissioner of Central Excise, Delhi, regarding the valuation of rubber foam goods manufactured by the respondents. The Commissioner found no duty evasion in sales made to related parties as the sale prices were the same as those to unrelated dealers, which accounted for about 80% of total sales. The appeal contended that the Commissioner's finding was based on sample invoices only, and there were financial transactions between the manufacturer and related buyers, who resold the goods at higher prices. However, upon verification of all invoices, it was confirmed that the sale prices were consistent for related and unrelated buyers. The Tribunal emphasized that when sale prices are the same for both related and unrelated parties, and the prices to unrelated buyers reflect the normal commercial price, all goods should be assessed at the normal sale prices to unrelated buyers, as per the legal precedent cited from the Supreme Court's decision in Commissioner of Central Excise v. Plus Cosmetics Pvt. Ltd.

The Tribunal found no merit in the appeal, stating that if sale prices are uniform for both related and unrelated parties, there can be no allegation of favored prices to related parties. As the sale prices were identical for both categories of buyers, the Tribunal concluded that there was no duty evasion in sales to related persons. The Commissioner's order was deemed free from error or illegality, leading to the dismissal of the appeal. The judgment highlighted the importance of consistent pricing and the legal principle that when prices are uniform for related and unrelated buyers, duty assessment should align with the prices charged to unrelated buyers.