Case: M/S.Tata Engineering &amp; Locomotive Co.Ltd Vs. Commnr. Of Central Excise

The appellant manufactures motor vehicles of various models. For each model the parts are according to its configuration and technical specifications and the price is also declared accordingly to the department. In other words, the value of the chassis depends upon its firments. All the chassis in question had been actually fitted with Engine No. 697 NA and Gear Box GBS 40. There is no dispute on this factual position between theappellant submitted the price list dated 1.11.1994 and 1.4.1995 wherein it was mentioned that the chassis of model no. 1612 is fitted with engine no. 692 DI engines and GBS 30 gear box whereas the chassis in question were fitted with engine no. 697 NA and gear box GBS 40. Relying on these price lists, Department raised differential demand and issued show cause notices to the appellant dated 22nd June, 1995, 4th July, 1995 and 1st November, 1995. In these notices, it was assumed that the appellant has collected Rs.15,290/- per chassis over and above the value declared in the price lists. This demand was confirmed by the Commissioner-respondent. Against the order of the Respondent, the appellant filed appeals before the31st October, 2000, the Tribunal passed a final order dismissing the appeal filed by the appellant. The contentions of the Appellant that they have paid duty at its invoice price on all clearances of chassis of model no. 1612 and that they have never recovered any amount over and above the invoice price from their customers, was not taken into account by the original Bench of the Tribunal dismissing the appeal. Therefore, appellant filed an application for rectification of mistake. Thereafter, the Tribunal passed order dated 11th January, 2001, dismissing the application for rectification of mistake. However, while passing the order on the application for rectification of mistake, a difference of opinion arose in the matter. The Member (Judicial), who was a party to the original Bench, allowed the application for rectification of mistake and ordered rehearing of the appeal. Learned Member specifically held that the appellant did urge this ground during the earlier arguments. The Member (Technical) dismissed the application on the ground of inherency. The 3rd Member who heard the matter referred to, agreed with the Memberpresent appeals have been filed by the appellants challenging the order dated 31st October, 2000 passed by the Tribunal as also the order dated 8th October, 2001 on the application for rectification of mistake.

Court's reasoning:
Central excise duty is payable under Section 4 of the Central Excise Act. Under Section 4(1)(a) of the Excise Act when the goods are sold for to an unrelated person and price is the sole consideration, then the assessable value of the goods is transaction value at the time and place of removal / delivery of the goods. Appellant has paid excise duty on the entire price charged by it from its customers in respect of sales made at the factory gate and no extra amount was realized over and above the invoice price. Even in respect of sales made from the depot, the amount of Rs.15,290/-, as alleged, has not been charged from the buyer. The invoices evidencing payment of duty on the entire amount collected from the buyer are also on record and the department has not disputed this position. Either in the order of the authority-in-original or in the order of the Tribunal, there is no finding directly or indirectly to suggest that the appellant had collected the amount of Rs.15,290/- for each chassis over and above what it had charged at the time of the clearance of the goods at the factory gate. In the absence of any evidence or a finding recorded by the Tribunal on the basis of such evidence, the findings recorded by the Tribunal that there is a short levy of the payable excise duty to the tune of Rs.15,290/- for each of the chassis, is not sustainable.