2002 (2) TMI 489 - AT - Central Excise

Summary

Issues:
1. Interpretation of Section 4(4)(d)(ii) of the Central Excise Act, 1944 regarding cum-duty price calculation.
2. Treatment of twisting charges as cum-duty charges for duty liability calculation.
3. Applicability of the decision of the Larger Bench of the Tribunal in the case of Srichakra Tyres Ltd.
4. Acceptance of abatement of excise duty from prices where duty was paid.

Issue 1: Interpretation of Section 4(4)(d)(ii) of the Central Excise Act, 1944
The appeal questioned the order regarding the additional consideration of cum-duty price based on the interpretation of Section 4(4)(d)(ii) of the Central Excise Act, 1944. The Commissioner (Appeals) followed the decision of the Larger Bench in the case of Srichakra Tyres Ltd. to determine the ambit and scope of the mentioned section.

Issue 2: Treatment of twisting charges as cum-duty charges
The case involved the exclusion of twisting charges from the assessable value for duty calculation by the respondents manufacturing polyester filament yarn. The duty amount short-paid on twisting charges led to a show cause notice and subsequent demand confirmation by the Assistant Commissioner. The Commissioner (Appeals) accepted the plea of the respondents, treating the price charged for goods as cum-duty price after considering the Larger Bench decision.

Issue 3: Applicability of the decision of the Larger Bench
The argument by the learned DR contested the acceptance of the Larger Bench decision in the case of Srichakra Tyres Ltd. by the Department, highlighting the admission of an S.L.P. by the Apex Court. The Tribunal, however, noted that the Larger Bench order had not been stayed by the Apex Court, making it a precedent to be followed in similar cases.

Issue 4: Acceptance of abatement of excise duty
The learned DR referred to judgments where it was held that abatement of excise duty from prices was permissible only if duty was paid on the goods, emphasizing that duty cannot be abated if not paid. The Tribunal upheld the impugned order, rejecting the appeal of Revenue based on the findings related to the treatment of twisting charges as cum-duty charges and the precedence of the Larger Bench decision over Division Benches' decisions.

In conclusion, the judgment upheld the decision of the Commissioner (Appeals) based on the interpretation of Section 4(4)(d)(ii) of the Central Excise Act, 1944 and the application of the Larger Bench decision in determining the treatment of twisting charges as cum-duty charges for duty calculation. The Tribunal emphasized the importance of following precedents set by the Larger Bench and rejected the Revenue's appeal, affirming the impugned order.