Collector Of Central Excise, Chandigarh v. Bharati Telecom Ltd.

[Order per : G.A. Brahma Deva, Member (J)]. - These are three appeals filed by the department on the issue that factory sales is lower than the depot sales and in fact the office of the party is also housed in the premises in which they are calling as their sales depot. Shri Vipin Handa, ld. SDR appearing for the Revenue while reiterating the ground taken by the department submitted that the customer can purchase goods from the factory which is situated on the outskirts of the city where the goods are available at a lower rate. They will not purchase from the sales depot at the higher rate. The inference remains that there is no sales at depot and it is …..undervaluing the goods. It was submitted that in the facts and circumstances of the case, the decision referred to by Collector in the case of Indian Oxygen Ltd. v. CCE reported in (S.C.) is not applicable to the facts of this case.

2. Shri P.S. Bedi, ld. Consultant appeared for the respondents and drew our attention to the findings given by the Collector (Appeals) in his order dated 13-6-91 and the relevant para is as under :-

“I have considered the appellants submissions in the appeal filed and during the course of personal hearing. The price at the factory gate is ascertainable and this goes unchallenged and undisputed by the adjudication order and as such the price at the sales depot is not relevant. It has been held by the Hon’ble Supreme Court in the case of M/s. Indian Oxygen Ltd. v. Collector of Central Excise reported in (S.C.) that in cases where the goods are partly sold from depots and partly from the factory, ex-factory price has to be the basis of value under Section 4 of the Central Excises and Salt Act even for goods sold from depot.”

3. He submitted that there was no evidence on record that factory gate sale price is not genuine sale price. Factory gate sales price has to be taken in determining the price as was held by the Supreme Court in the case of Indian Oxygen Ltd. He drew our attention to the relevant portion wherein it was held that since the ex-factory price is ascertainable, such ex-factory price shall be the basis for determination of value under Section 4 of the CESA, 1944 and the question of transportation charges become irrelevant.

4. Shri Vipin Handa submitted that quantum of percentage of sales at factory gate was negligible compared to the sales at sales depot.

5. On a careful consideration of the submissions made by both sides with reference to the facts, we find that there was no finding by the adjudicating authority regarding the quantum of percentage which took place at the factory gate sales. On the other hand it was clearly admitted by the department that there was a factory gate sales. In the absence of any evidence to show that factory gate sales was not genuine and since the ex-factory price is ascertainable, following the ratio of the decision of the Supreme Court, we uphold the impugned order passed by the Collector (Appeals) in all these appeals and accordingly the appeals filed by the department are hereby dismissed.