ORDER
M.P. Bohra, Member (J)
1. This appeal has been filed against the order passed by the Commissioner of Customs and Central Excise (Appeals), Mumbai circle. The brief facts of the case are that the appellant M/s. BOC India Ltd. vide their price declaration 94-95/2003 and 94-95/2004 declared the price of their product IOLAR ARGON at Rs. 8,739.17 but cleared the same at a price lower than the price declared in their price declarations. Show Cause notice was issued for the period July, 1997 to December, 1997 demanding Central Excise Duty of Rs. 3,08,538.00 which was issued by the Asstt. Commissioner vide Order-in-Original dated 17-6-1998. Appeal was filed against the said order. Commissioner of Appeals who vide Order-in-Appeal dated 23-3-2000 remanded the case back for de novo consideration. The Adjudicating Authority again confirmed the demands amounting to Rs. 3,08,538.00 under Section 11A and also charging interest under Section 11AB and imposing penalty under Rule 173Q vide Order-in-original dated 6-12-2001. The Appellant preferred appeal against the order and the Commissioner of Appeals, Central Excise, Mumbai rejected all the Three Appeals.
2. Heard Shri S.K. Bagaria, Sr. Advocate and Shri Partha Banerjee, Advocate for Appellant and Shri T.K. Kar, SDR for Respondent. Mr. Bagaria submits that the subject matter of present appeal relates to the period December, 1994 to September, 1998. The relevant provisions of law as regards determination of assessable value were under Section 4 of the Central Excise Act, 1944 up to 27-9-1996, the assessable value of the goods removed to the depots was liable to be determined on the basis of ex-factory prices. This position was laid down by the Hon’ble Supreme Court in the judgment of the Appellant’s own case reported in 1988 (36) E.L.T. 723 (Indian Oxygen Ltd. v. CCE). On 28-9-1996, Section 4 was amended and depots were also included in definition of the expression “Place of removal” in terms of the amended Section 4, in respect of the goods removed to the depots, the price prevailing at the depot concerned at the time of removal was to be the assessable value. This position was also clarified by the Central Board of Excise & Customs in Circular No. 251/85/96 C. Ex., dated 14-10-1996. He submits that Rule 173C of the Central Excise Rules, 1944 as is stood up to 31 March, 1994 provided about filling of Price Lists and their Approvals by proper Central Excise Officers. The said Rule 173C was substituted by a new rule with effect from 1-4-1994. In new procedure the filing of Price Lists or their Approval was done away with. On the other hand, the new Rule 173C required that the value under Section 4 shall be declared in the invoices themselves. Thus, effectively, each invoice was for all purposes a Price Declaration itself. The system of assessment of invoice value was also recognized by Central Board of Excise and Customs in Circular No. 62/62/1994, dated 20th September, 1994. The second proviso of the Rule 173C(1) provided for filling of declarations by the assessee of the type mentioned therein. The Appellant was covered by the second proviso, such price declarations were being filed by it under the said second proviso to Rule 173C. He submits that since the assessable values were being declared on each invoice in accordance with the provisions of Section 4 read with Rule 173C(1), the price declarations were being taken as merely of informative nature and at times, in respect of the prices revisions, the amended declarations were not filed. On 29-7-1994, the Appellant filed a Declaration (effective from 1-6-1994) under the second proviso to Rule 173C(1) of Rule 1944 declaring ex-factory assessable value of the said goods at Rs. 8,739.17/- per hundred Cu. M. In respect of the sales from depots, the Appellant filed two Declarations on 21-4-1995 effective from 1-12-1994 and 1-3-1995 declaring the value at Rs. 8,300/-and Rs. 7,200/- respectively per hundred Cu. M. The Department issued 21 show cause notices from time to time relating to the period from December, 1994 to June, 1997. It was liable to pay duty on the value of Rs. 8,739.17/- declared in the Declaration dated 29-7-1994 which was effective from 1-6-1994. The other two declarations mentioned above were totally ignored in these notices and the differential demand was aggregated to Rs. 14,73,003.04/-. The matter came up before the CEGAT and CEGAT remanded the appeals to the Commissioner of (Appeals). The Commissioner of appeals remanded the matter to the Assistant Commissioner. The Commissioner passed order dated 27th March, 2002 and confirmed this demand of Rs. 14,73,003.04 paise. Three other similar show cause notices were issued for the period from July, 1997 to December, 1997 and from January 1998 to September, 1998 involving differential duty of Rs. 10,92,254/-and Rs. 3,08,538/- and are also imposing penalty of Rs. 15,000/- and Rs. 5,000/-respectively under Rule 173Q. The Commissioner (Appeals) by a consolidated Order dated 22-10-2002 dismissed the appeals.
3. He submits that when there is no dispute with the price charged from the buyers, were those mentioned in the invoice, no duty can be demanded simply because revised price declaration were not filed. He submits that there is no provision of Law in the Central Excise Act, 1944 or in the Rules framed therein on the basis of which assessable value of the goods cleared during the said subsequent period of December 1994 to September, 1998 could be determined based on the said old price declaration effective from 1st June, 1994. The assessable value during the said period of December 1994 to September, 1998 was based on the actual invoice price for each clearance and this was in accordance with the Law. The goods were actually sold by the appellant at lower price mentioned in the invoice. The Commissioner of Appeal has also recorded the same thing in his order. This is not the Department case that the appellant charged from the buyers any amount over and above the invoice price. He, further, submits that the period covered by the present appeal is December, 1994 to Sept., 1998. During this period under Rule 173C each invoice itself was for all purposes a price declaration itself. The said system of assessment of invoice value was also recognized by the Central Board of Excise and Customs in Circular No. 62/62/1994, dated 20th September, 1994. He further, submits that the Rules 173C was only a matter of procedure for determination of assessable value and only be meant in accordance with proviso of Section 4 of Central Excise Act read with Central Excise Valuation Rules 173C which does not fasten any provision for determination of assessable value. It only lays down the procedure for declaring the value in invoice or for filing of a declaration etc. Therefore, he submits that simply due to non filing of the revised price declaration, the invoice price cannot be ignored. He relied on the following decisions :
(i) Reported in 2003 (58) RLT 193 (Mardia Chemicals Ltd. v. CCE)
(ii) Reported in 2001 (130) E.L.T. 631 (T) = 2000 (39) RLT 377 (Vidhya Packaging Industries Pvt. Ltd. v. CCE)
(iii) Reported in 2002 (147) E.L.T. 815 (T) – 2002 (52) RLT 980 (Hindustan Engg. & Industries Ltd. v. CCE)
He, further, submits that in the instant case there has been no contravention of any of the provisions of law and levying of penalty under Rule 173Q was illegal. Therefore, he submits that the appeal may be allowed.
4. In reply learned SDR submits that filing of the declaration is mandatory and he reiterates and supports the order passed by the authorities below.
5. In present case the appellant had not charged any higher price from any buyer. There was no such allegation in show cause notice nor any such finding has been given by the Assistant Commissioner or Commissioner of Appeals. The demand has been raised on old declaration dated 1st June, 2004. The old declaration related to earlier period and had no bearing on determination of assessable value for the relevant period. The entire period is from 1st April, 1994. Rule 173C was substituted and the procedure of approval of price list was no longer in existence from 1-4-1994. The value was to be declared on each invoice at the time of clearance. There is no provision in the Central Excise Act or in the Central Excise Rules under which the value can be increased on the basis of declaration filed prior to the relevant period. In respect of the clearance to the depot, the position of law up to 27th September, 1996 was that the ex-factory price available. This became the assessable value. This position of law was affirmed by Hon’ble Supreme Court in the appellant’s own case reported in 1988 (36) E.L.T. 723. From 28 Sept., 1996 the depot was also included in the definition of expression placed on removal in Section 4 of the 1994 Act. Consequently, in respect of the removal to the depots, the assessable value in respect of the goods removed to the depot was liable to be determined on the basis of Section 4. In present case, the appellant had followed the same procedure and there is no illegality in determining the assessable value. Similar view was taken in the following cases :-
(i) In the case of Mardia Chemicals Ltd. v. CCE, Rajkot, reported in 2003 (58) RLT 193, the CEGAT- Mumbai Bench has held that Assessable value – Section 4 of CEA, 1944 – Normal price – Rule 173C of C.Ex. Rules, 1944 – Excise duty was paid on actual price charged, though it was lower than price declared under Rule 173C – no allegation of collection of differential price – actual price charged is normal price under Section 4 – demand based on price declared under procedural Rule 173C is not sustaihable – appeal allowed.
(ii) Similar view has been expressed in the case of Vidhya Packaging Industries Pvt. Ltd. v. Commissioner of Central Excise, Allahabad reported in 2001 (130) E.L.T. 631 (T) = 2000 (39) RLT 377, CEGAT Delhi has held that:
Assessable value – Section 4(1)(a) of CEA, 1944 – Invoice price -higher value declared in the price declaration but the goods were actually sold at a lower price as per the sale invoices – no evidence of flow back – lower invoice price to be the assessable value – demand, penalty and interest set aside – assessee’s appeal allowed and Revenue’s appeal dismissed (para 3).
(iii) Same view was taken in the case of Hindustan Engg. & Industries Ltd. v. CCE, Calcutta-IV reported in 2002 (147) E.L.T. 815 (T) = 2002 (52) RLT 980 CEGAT – Kolkata has held that:
Assessable value – Section 4 of CEA, 1944 – Rule 6 (b)(i) of Central Excise (Valuation) Rules, 1975 – goods supplied to sister unit – to be assessed on the basis of immediately preceding sale price to independent buyer and not on the basis of subsequent sale price.
Assessable value – Section 4 of CEA, 1944 – Rule 6 (b)(i) of Central Excise (Valuation ) Rules, 1975 – Comparable goods – un-machined goods supplied to sister unit, not comparable with machined items sold to independent party – sale price of machined item not to be adopted.
Assessable value – Section 4 of CEA, 1944 – reduction in contracted price is agreed and reduced invoice price is actually recovered – reduced price acceptable – appeal allowed.
5. In the present case also it is true that the appellant made a declaration regarding the value of goods but it sold the goods manufactured by it at a lesser price shown in the invoice. The Department has not disputed that the price shown in the invoice was not correct nor had there any case that any amount over and above the amount covered by the invoice flow back to them from the buyer. Under such circumstances, the price at which the goods were sold to the others was the sole consideration for the sale as contemplated by Section 4(1)(A) of the Act and, therefore, the Department was not justified in claiming the differential duty on the basis of price declaration.
6. In present case the demand in show cause notice was not due to non production of invoice but it was simply by relying on the old declaration. The old declaration was the sole basis for differential demand. When invoice details were given in the show cause notice, obviously all the invoices were lying with the Department. The Commissioner has also observed in his order that “The Department did their job by issuing the demand based on the invoices supported by the appellant to the Department” (Page 33). The invoice would only show as to whether the goods were removed to depots or cleared to the buyers. The issue is covered by the decision rendered in the above mentioned cases.
7. In view of above discussion the appeal is allowed with consequential relief to the appellant.