Jem Industries Ltd. Vs. Commissioner of Central Excise

.....should be the basis for assessable value. this decision is applicable to the present case. the bulk of the sales are to unrelated buyers in the year 1996-97 over 79.64% and during the years from 1997-98 to 2000-01, around 73.28%. therefore, the normal ex-factory gate price sale is available that should be the basis of the assessable value. that being so, this is known value for which duty should be charged even for clearance to m/s. jmpl and extra discount passed on to m/s. jmpl would not be an admissible deduction. therefore, duty is to be charged only on that extra amount of discount which is required to be added to assessable value and it is not to be worked out, totally on the value at which m/s. jmpl in turn sold the goods to their other customers." it will be apparent that the commissioner proposed to establish a uniform price at the factory gate. thus he is disregarding the discount to a bulk purchaser. thereafter the commissioner has gone on to determine the valuation which is not only beyond the show cause notice issued as was submitted by the ld. advocate for the appellant, but also the reasoning adopted by the commissioner is not as per the law laid down by the apex court as regards valuation under the central excise act, 1944 in the case of metal box india ltd 1995 (75) elt 449 + (2002-tiol-108-sc-cx). in this case, while approving the decision of the gujarat high court in the case of gujarat state fertilizers ltd. 1980 (6) elt 397 wherein the concept of 'uniformity' was not upheld as no such basis found in section 4. the apex court also held that a bulk buyer when he gets special discount cannot be treated as viewed by the commissioner to reload the price for the purpose of duty by notional value in view of the settled position of law and the fact that the commissioner has proceeded beyond the issue raised in the show cause notice, order cannot be sustained. the same is set aside except as regards the finding on related person.