Customs, Excise and Gold Tribunal - Delhi
Asstt. Executive Engineer vs Collr. Of C. Ex. on 13 July, 1998
Equivalent citations: 1998(62)ECC204, 1999(112)ELT270(TRI-DEL)
ORDER
U.L. Bhat, J. (President)
1. Appellant is represented by Shri K.S. Manga, Assistant Executive Engineer. We have heard both sides.
2. Appellant is the Assistant Executive Engineer incharge of the workshop belonging to Punjab State Electricity Board, where PCC poles are manufactured. The dispute arose in the wake of price list No. 46/90-91 with effect from 1-4-1990. The order passed by the Assistant Collector of Central Excise refers to the declared value as Rs. 386.20 per pole. The price list was filed in form No. VI as the poles were intended for captive consumption by the appellant and the same was approved provisionally. The Assistant Collector finally approved the price list directing duty to be paid on the assessable value at Rs. 524.25 per pole. That was the price approved finally for PPC poles manufactured at the Mohali Workshop of the Electricity Board. Show cause notice was issued proposing demand of differential duty in respect of 25416 poles of differential value of Rs. 94.03 per pole. Appellant resisted the notice contending that the labour used in Muktsar Workshop being contract labour was less expensive than the departmental labour used in Mohali Workshop and this accounted for the differential value and the lower value should be accepted. The Assistant Collector rejected the contention on the ground that assessable value of comparable goods manufactured by the appellant was ascertainable and should be adopted. This order having been confirmed by the Collector (Appeals), the present appeal has been filed.
3. Determination of assessable value of poles captively consumed by the manufacturer is governed by Rule 6 of the Central Excise (Valuation) Rules, 1975. Sub-rule (b)(i) has been invoked in the instant case. According to this provision, the assessable value shall be based on the value of the comparable goods manufactured by the assessee or by any other assessee. According to the proviso to this clause, in determining the value the proper officer shall make such adjustments as appear to him reasonable, taking into consideration all relevant factors and, in particular, the difference, if any, in the material characteristics of the goods to be assessed and of the comparable goods. There is no dispute that PCC poles manufactured in the two workshops of the appellant are comparable goods. In this view, the lower authorities were right in holding the assessable value of the poles manufactured in the Muktsar Workshop should be based on the assessable value of poles manufactured in the Mohali Workshop.
4. The more important question relates to the adjustments, which, according to the appellant, the proper officer should have made in determining the value under Rule 6(b)(i) of the Rules. The difference in the cost of raw materials at the two places, the difference in other conditions in two places and the difference in the cost of availability and of cost of labour in the two places would certainly be relevant factors which are required to be taken into consideration for making adjustment in the assessable value. One workshop may be close to the source of raw materials, while the other workshop may be situated far away from the nearest source of the raw materials. In such a situation, obviously the total cost of raw materials when they reach the two workshops will not be the same. Equally if labour is freely available at one place and not freely available at the other place, the cost of labour may vary. It has been the consistent contention of the appellant that contract 'abour was being used in Muktsar Workshop and departmental labour was being used in Mohali Workshop and the latter was more expensive than the former. If this factual position is true, that would account for legitimate difference in the cost of labour in the two workshops. The question is whether the cost of labour was really different. It is pointed out that the contract labour used in Muktsar Workshop was being paid Rs. 20.42 per pole. Such direct figure may not be available in respect of the departmental labour used at Mohali, but the appellant's representative states that the figure can be worked out from the data available at the Mohali Workshop. We are of opinion that the factual situation requires examination.
5. For the reasons indicated above, we set aside the impugned orders and remand the case to the jurisdictional Adjudicating Authority for decision afresh after giving the appellant an opportunity of producing necessary materials to show the comparable cost of labour incurred at Mohali. Appellant shall produce all the necessary materials before the jurisdictional Authority within two months from today.