DHARAMPAL SATYAPAL Vs. CCE

JUDGEMENT

(1.) M/s. Dharampal Satyapal have filed two appeals along with two stay petitions. Revenue has filed two appeals against the same impugned order. Since all the four appeals and stay petitions arise out of the same impugned order they were heard together and are being disposed of by this common order. In the stay petitions filed by the assessee there is a prayer for staying operation of impugned order. Since the duty has not been quantified there is no question for financial hardship at this stage.

(2.) Since there is no quantification of the amount of duty the two stay petitions are rejected. With the consent of both the parties the four appeals were taken up for hearing.

(3.) The facts of the case briefly stated are that M/s. Dharampal Satyapal are engaged in the manufacture of chewing tobacco. They sell goods manufactured by them from their depots. Their sale invoices indicate FOR destination price, which includes the cost of transportation, octroi, sales tax, luxury tax, insurance, trade discount etc. The exact incidence of which is not known at the time of their clearance. Therefore, they have been operating under Rule 9B of the Central Excise Rules, 1944. Provisional assessments for the period 1998 -1999 upto March 1999 were finalized by the Order dated 19.8.99. A Show -cause Notice was issued to the assessees asking them to explain as to why the duty amount of Rs. 58,53,143 on the deductions claimed should not be recovered from them and why interest on the above amount should not be charged from them under Section 11AA of the Central Excise Act, 1944. In reply to the Show -cause Notice it was contended that assessments during the material period were based on assessable value determined after deduction of items shown in the show -cause notice; that the assessments were finalized by the jurisdictional Assistant Commissioner, that the assessments were finalized after issue of a number of Show -cause Notices. It was further submitted that all data asked for by the Department was submitted. The Assistant Commissioner confirmed the demand of Rs. 58,53,143. Being aggrieved by this order the assessee filed an appeal before the Commissioner (Appeals) who held, "I find that in the instant case the goods were being sold by the appellant from its depot on FOR destination price which includes elements like incidence of octroi -entry tax; luxury tax and distribution discount. The aforesaid items were claimed by the party as deduction from the depot sale price to arrive at the assessable value under Section 4 of the Central Excise Act, 1944. The actual incidence of deduction was not known at the time of sale of goods, therefore, the assessments of the appellant were made provisional under Rule 9B of Central Excise Rules, 1944." It was further held that in view of the change in definition of place of removal, sale price at the price of removal such as depot or any other place etc., has to be taken as normal sale price for determination of assessable value. A sale price at any place of removal other than factory gate has to take into account all the expenses incurred towards transport including freight, insurance etc. from factory gate to such place of removal and other expenses incurred in maintaining and running the said place of removal and thus all the expenses will form part of the sale price for determination of assessable value. This issue has already been clarified by CBEC vide its Circular No. 251/85/96 -CE dated 14.10.96.