Customs, Excise and Gold Tribunal - Bangalore
Cce vs Wintab Equipments Pvt. Ltd. on 19 July, 2005
ORDER S.L. Peeran, Member (J)
1. This is a Revenue appeal against the order passed by the Commissioner (Appeals) holding that the differential duty demand, which arose because of non-inclusion of excise duty component in the value of Valves, is not justified. She has held that excise duty component need not be included in the value of the Valves which were supplied free of cost. The penalty imposed under Rule 25 of CE Rules and interest under Section 11AB have also been set aside.
2. The appellants had contended that the value of Valves supplied by the customer (Free Issue Material) was always included by the assessee in the assessable value for the purpose of calculating excise duty payable no the cylinders. The duty was paid on the price, which is inclusive of additional consideration received from the customer and that there was no short payment of duty in this regard. They had also contended that Cenvat credit of duty paid on the inputs (Valves) is excludable from the cost of inputs for the purpose of arriving at the assessable value of the final product. In this regard, they had relied on he ratio of the judgment of the Tribunal rendered in the case of Prasanth Cylinders Pvt. Ltd. v. CCE 1998 (76) ECR 403 (Tribunal) wherein it was held that modvat credit availed of by a manufacturer on inputs supplied by the customer for goods manufactured on job work basis is not includible in the assessable value of the final product. They had also relied on the larger Bench decision in the case of Dai Ichi Karkaria Ltd. v. CCE 1996 (63) ECR 23(T), followed by CCE, Aurangabad v. Sundal Industries Ltd. 2002 (53) RLT 983 (CEGAT-Mum.) wherein it was held that modvat credit taken by raw material suppliers in respect of raw materials is to be excluded from the cost of raw material while working out the assessable value of the finished goods manufactured by the job worker. The Commissioner (Appeals) has accepted these judgments and has applied the same. She has also applied the ratio of the Tribunal ruling rendered in the case of GK Steels (CBE) Ltd. v. CCE, Coimbatore 2002 (53) RLT 1065 (CEGAT-Chennai) to set aside the interest levied under Section 11AB. She has also set aside the penalty by applying the ratio of the judgment in the case of BNK Parts Pvt. Ltd. and Anr. v. CCE 2002 (49) RLT 725 (CEGAT-Chennai).
3. The respondents have not appeared despite notice. They have submitted their cross-objections.
4. The Revenue's arguments in terms of grounds of appeal were considered. The learned JDR reiterated the grounds.
5. On a careful consideration, we notice that the Commissioner (Appeals) has clearly examined the entire issue and has held that the excise duty component need not be included in the value of Valves which are supplied free of cost by the oil company for arriving at the assessable value. In this regard, she has relied on a larger number of materials, which are pan material to the facts of the case. The value had already been added. The Commissioner (Appeals) has clearly noted that the value had already been added in the components, which had been supplied, and it was inclusive of the excise element. Therefore, the judgments applied are clearly applicable to the facts of the case. The grounds of appeal does not say as to how the ratio of the judgments are not applicable to the facts except to reiterate that the assessee has not added the excise element of valves while paying the duty on components.
6. The respondents in the cross-objections, have clearly stated that they are manufacturers of LPG Cylinders (Empty) falling under CH 7311. While availing exemption under Notification No. 9/2002-CE dated 1.3.2002, they had paid duty @ 9.6% even after crossing First slap limit of Rs. 1.00 crore of value of clearances. When the lapse was brought to their notice, they had re-calculated the assessable value excluding the Cenvat credit of duty paid on inputs (Valves) and paid the differential duty of Rs. 44,770/- with interest on the same and intimated the facts to the department. Therefore, they contend that the Show Cause Notice, issued thereafter No. 31.7.2003, cannot demand interest and penalty as the amount had been paid in advance. This plea is also acceptable in the light of the judgment cited by the Commissioner. There is no infirmity in the impugned order and, therefore, the appeal is rejected.
(Pronounced in open Court on 19.7.2005).