ORDER
Krishna Kumar, Member (J)
1. Heard both sides.
2. The issue relates to valuation of yeast cleared by the appellants to its depots, from where the said yeast was sold. The period of dispute is after 28th September, 1996 when depot was notified as a place of removal. The ld. Commissioner has by his impugned order directed that the assessable value of such yeast transferred to the depots should be determined based on the highest price prevailing at the Depot. The Commissioner has involved the larger period of limitation on the ground that even though the appellants have filed price declaration in Annexure II, but the same was a tentative price on the day of filing of the declaration and that appellants ought to have voluntarily debited the differential duty whenever the goods were sold from the depot at a higher price. The ld. Counsel for the appellants has contended before us that there was absolutely no legal basis disclosed to justify adoption of highest price prevailing at the depot for determination of the assessable value and that the Tribunal in the case of Somaiya Organics (India) Ltd. , has rejected a similar contention of the Department. He further placed reliance on CBEC Circular No. 25l/85/96-CX dated 14.10.1996 wherein it was clarified that the price prevailing at the depot on the date of removal from the factory is relevant for determining the assessable value and not the price at which the goods are ultimately sold from the depot. He further submitted that the demand was barred by limitation as the appellants have earlier been issued a notice in the year 1990 wherein the department had sought to value the goods cleared by the appellants from its factory to its various depots based on the highest price prevailing at its U.P. Depot. The said contention of the Superintendent was not accepted by the (CECA), who vide his order No. 12/AC/STP/91 dated 27.3.1991 held that it is the wholesale price prevailing at the different depots which ought to be taken as basis for determining the assessable value. This order clearly indicates that from 1990 onwards, the Department is well aware that the appellants are making sales through its depots at varying prices. He further stated that for the period in dispute of 18 months, it had tiled as many as 52 price declarations (copies at pages 94 to 167 Vol. IV of the appeal file) for all its 14 depots (14 depots X 3 declaration for each depot) declaring therein the wholesale selling price of the goods from its depot. It had also filed its marketing declarations from time to time wherein it had very categorically stated that sales were being effected through its depots/branch office. It had also stated that the price to its whole sale dealers varied all over the country as also from region to region, territory to territory and state to state. He also stated that not only appellant’s monthly RT-12 returns were audited by the department but its factory records had also been audited by CERA as well as by the department as the Auditors who had, amongst other things, verified the invoices under cover of which goods were being sold from the depot. It was further contended that even if the demand was recomputed based on the price at which each individual consignment was sold at the depot and from such price abatement on account, of freight, discount, interest etc. was granted, it would have been entitled to refund. Reliance in this regard was placed on VIP Inds. – 2000 (155) ELT 8 (S.C.).
3. The ld. DR reiterated the findings of the Commissioner and emphasized that appellants ought to have discharged duty based on the actual realization effect in respect of its depot sales.
4. Having heard, perused the records and the case laws, we agree with the appellants contention that there is no legal basis for adopting the highest price prevailing at the depot for determining the assessable value in respect of clearances effected to the depot. The order of the Commissioner holding that the price declared in the price declaration was a tentative price and that appellants ought to have discharged duty based on the actual realization is also contrary to the clarification given by the Board in its Circular No. 251/85/96-CX dated 14.10.96. We agree that the demand is barred by limitation as the dispute regarding valuation of depot clearance was the subject matter of dispute since 1990 and the Deptt. was aware that the goods were being sold by the appellants at varying prices from its depots. Appellants have filed as many as 52 price declarations for the period of 18 months in dispute, the correctness thereof has not been challenged by the Department. The marketing declaration filed by the appellants also clearly stated that the prices vary from buyer to buyer, territory to territory and state to state. Therefore, the allegation in the notice that the appellants have suppressed from the Deptt. The fact that there was variation in the prices is not correct. The monthly RT-12 returns have also been audited by the Deptt. The records also contain various audit intimations clearly evidencing that the Deptt was conducting necessary audit from time to time and verifying the appellants records. Therefore, we have no hesitation to hold that the larger period is not invokable.
5. In view of the above, we set aside the impugned order and allow the appeals filed by the appellants.
(Pronounced in Court on 20.12.2005)