ORDER
Archana Wadhwa, Member (J)
1. As per the facts on record, the appellant is engaged in the manufacture of “Fresh Compressed Yeast” felling under Chapter 21 and during the relevant period was selling the same to two different wholesale buyers M/s. Continental Stores, Mumbai and M/s. Cyrus Yeast, Mumbai. The price at which the goods were being sold to the above two buyers was slightly different.
2. The appellants was served with a show cause notice proposing to confirm the demand of duty of Rs. 1,29,193/- in respect of the yeast cleared to M/s. Cyrus Yeast, Mumbai, during the period April 96 to May 99 at a lower price than the price charged from M/s. Continental Stores, on the alleged ground that both the said buyers were working from same business premises and the proprietor of both the said buyers was the same. The appellants took a stand that both the buyers were different classes of buyers inasmuch as M/s. Continental Stores, Mumbai, cater to the market situated outside the Maharashtra and M/s. Cyrus Yeast sells the goods within the state of Maharashtra. The competition in the far flung areas are comparatively less in comparison to the market in the vicinity areas i.e. Mumbai, and as such low selling price was charged from M/s. Cyrus Yeast to sustain the local competition. They also challenged the demand on the point of limitation.
3 The Additional Commissioner, however, did not find favour with the above submission of the appellants and confirmed the demand as proposed in the notice along with imposition of personal penalty of identical amounts. On appeal against the above order, the Commissioner (Appeals) upheld the same but reduced the penalty amount to Rs. 5000/-. Hence the present appeal.
4. We have heard Shri D.M.Mishra, Ld. Advocate appearing for the appellants, who reiterated the same ground. Shri Sanjay Singhal, Ld. JDR appeared in support of the impugned orders.
5. The appellant’s main contention is that the two buyers are independent wholesale buyers and are different classes of buyers inasmuch as they are catering to two “different areas, one in Mumbai and one outside Mumbai. The goods are being sold to them at the commercial consideration and the fact that both the buyers are working from the same premises and are controlled by the same proprietor will not effect the price consideration, inasmuch as it is not the duty of the manufacturer to find out the relationship between its different buyers. We find that the Commissioner (Appeals) has taken note of the Tribunal’s decision in the case of Kirloskar Brothers Ltd. v. CCE (2001 (133) ELT 97) wherein it was held that the different price is permissible within the same class of buyers provided no extra commercial considerations were involved, but did not followed the same on the ground that the appellants were changing their stand as to why they changed different prices from their above mentioned wholesalers. We are not convinced with the above reasoning of the lower authorities. The difference of price charged to these wholesalers was only to the extent of 0.5%, for which the appellants have given a plausible explanation. There is nothing on record to show that the price charged by the appellants was not on account of commercial, consideration of two buyers catering to the two different areas. We take note of Tribunal’s decision in the case of G.K.N Drive Shafts (1) Ltd. v. Commissioner of Central Excise, Delhi (2003 (154) ELT 177 (Tri.-Del.) holding that the same person can be held as different classes of buyers justifying two prices for the same components. In the instant case there are two different buyers merely because they are being controlled by one proprietor will not effect their status. As such, we are of the view that two different prices for the two different buyers classifiable as two classes are justifiable. As such, we set aside the impugned order and allow the appeal with consequential relief to the appellants.
(Pronounced in Court)
