IDI LIMITED Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) On hearing both sides on the application for stay of operation of the impugned order, we find that the appeal itself could be taken up for disposal. This was so done.

(2.) The appellants sell their goods at factory gate on payment of duty to various customers. Some goods are transferred to their own depots on payment of duty on the basis of stock transfer invoices. The prices at which such goods were sold from the depots varied and were not the same at the prices as which the goods were cleared from the factory on payment of duty.

(3.) 16 show cause notices were issued covering the period. The allegations were identical. It was claimed that the prices at which the goods were transferred to their own depots were lower than the prices at which goods were sold to outside. It was also alleged that different prices were charged for the same goods from the same buyers and the same phenomenon had recurred in Ex -depot sales also. it was claimed that such sales at differential prices were made without any determination of classes of buyers under proviso (i) of Clause (a) of Sub -section (1) of Section 4 of the Central Excise Act, 1944. It was claimed that by virtue of these practices, short levy had occurred to the extent of Rs. 2,76,43,950.11. The Assistant Commissioner observed that when the practice of filing price list was in vogue, assessees were filing both Part -I and Part -II pricelists. At a later date also different prices were charged to different classes of buyers. He observed that the show cause notice did not allege that such sales on contract basis were not genuine. He referred to and relied upon a number of judgments where the Tribunal had upheld different prices being charged from different persons provided they were motivated by commercial reason alone. He relied upon certain instructions issued by the Board which were passed subsequent to the amendment whereby the prices charged at the depots were made the basis of assessment provided the goods were deposited in such depots without payment of duty. On this analysis he dropped the demand.