Nagarjuna Agrichem Ltd vs Commissioner Of Central Excise ...

[Arising out of Order-In-Appeal No 236-2006 dated 15/02/2007 passed by CC,CE&ST, Visakhapatnam]

For approval and signature:

HON'BLE Shri JUSTICE G. RAGHURAM, PRESIDENT

HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

NAGARJUNA AGRICHEM LTD PLOTNO.177, ARINAMA AKKIVALASA(V), ALLINAGARAM (PO), ETHERLA, SRIKAKULAM DIST Appellant(s)

Versus

Commissioner of Central Excise ,Customs and Service Tax VISAKHAPATNAM-I NULL CENTRAL EXCISE BUILDING PORT AREA VISAKHAPATNAM - 530035 ANDHRA PRADESH Respondent(s)

Appearance:

Shri G.P. Sastry, Advocate G.R. KUMAR AND CO.

NO.9, MERRY LIFE APPARTMENTS, DOCTOR'S COLONY, PEDA WALTAIR, VISAKHAPATNAM - 530017 AP For the Appellant

Shri R. Gurunathan, Addl. Commissioner(AR) For the Respondent

Date of Hearing: 04/02/2015

Date of Decision: 04/02/2015

CORAM:

HON'BLE Shri JUSTICE G. RAGHURAM, PRESIDENT

HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 20274 / 2015

Per : B.S.V. MURTHY

Appellants were clearing insecticides / pesticides at factory gate as well as on stock transfer basis to their depots and paying central excise duty on stock transfer price. Taking a view that the appellants while clearing goods to depots / premises of a consignment agent were required to adopt the price prevailing at the depot at the time of removal of the said goods from the factory or the nearest date on which the goods were sold, proceedings were initiated. Taking note of the fact that there were certain cases where the appellants did not adopt the laid down procedure, the lower authorities have held that the appellant has to pay differential duty of Rs.56,560/- with interest and penalty has been imposed. Learned Counsel submitted that the demand has arisen because the department is asking the appellant to pay the duty on freight in respect of their clearance to the depots. He submits that this is not correct. However, on going through the reply to the show cause notice it was found that the appellants have submitted as under:

Further, the sales at the depot are by and large are retail sales and thus, they cannot be taken as the basis for purpose of determining Assessable Value under concept of normal price as prevailing at the material time. The Show Cause Notice has adopted the value of clearances made from 7/2003 to 11/2003 made at Indore and Hissar. In both the cases, price difference as exhibited in the statement enclosed to the Show Cause Notice shall only be the price difference as occasioned on account of freight and other incidental expenses as involved at the depot. Hence, these minor factors cannot result in demand of differential duty for purpose of Central Excise duty demand. 

Where the sale is taking at places other than the place of removal (including the factory), Excise Duty is required to be paid at the price as determined at the actual place of removal (which includes depots also). Further they have submitted that it is a well settled preposition of law in respects of dispatches made from the factory to the depots, the price to be adopted for the purpose of payment of duty is not the price at which goods are sold at depot.

2. The stand taken by the appellants that the price charged by the depot cannot be taken into account in the last paragraph is totally wrong. There is no clear evidence brought out. They have not shown that demand for differential duty worked out is not correct and why it is not correct. The appellant says that the department has not applied the legal provisions correctly. They have made contradictory claims in reply to the show cause notice and even before us, the argument was that the department is demanding differential duty on freight and in support of this claim no evidence was found. Under the circumstances we do not find any merit in the appeal. Accordingly appeal is rejected.

(Order pronounced in open court)

JUSTICE G. RAGHURAM PRESIDENT

B.S.V. MURTHY TECHNICAL MEMBER

Raja 4