2001 (10) TMI 733 - AT - Central Excise

Summary

Issues:
1. Duty payment on processed fabrics.
2. Correct classification of processed fabrics.
3. Inclusion of various charges in assessable value.
4. Acceptance of test report on fabric classification.
5. Addition towards profit in charges recovered.

Analysis:
1. Duty Payment on Processed Fabrics:
The Commissioner found that the appellant, a processor of textile fabrics, did not pay appropriate duty on certain fabrics due to discrepancies in job charges declared. The appellant's argument that actual charges were less than declared ones lacked written evidence, leading to rejection of this claim. Additionally, the appellant included amounts in processing charges for elements like freight and octroi, which exceeded actual costs. The Commissioner upheld the inclusion based on a trade notice, but the appellant's submission of supporting evidence for actual costs was not considered. The Tribunal directed a fresh determination considering the evidence provided.

2. Correct Classification of Processed Fabrics:
Another issue was the classification of a consignment under the wrong heading. The appellant contended that the goods were not velvet but a simple woven fabric, supported by a test certificate from a research association. The Commissioner dismissed the certificate, prompting the appellant to suggest testing the fabric in departmental laboratories. The Tribunal found this suggestion reasonable and directed further testing for accurate classification.

3. Inclusion of Various Charges in Assessable Value:
Regarding the inclusion of charges in the assessable value, the appellant argued that the charges already covered the processor's profit, making a separate addition unjustified. This argument aligned with commercial practice and a previous tribunal decision. Consequently, the Tribunal ruled in favor of the appellant and set aside the Commissioner's order, allowing the appellant to present evidence for both issues in a fresh determination.

In conclusion, the Tribunal allowed the appeals, emphasizing the need for a thorough reevaluation by the Commissioner on duty payment, correct classification, and inclusion of charges in the assessable value. The appellant's right to provide evidence and the suggestion for further testing were acknowledged, ensuring a fair and comprehensive review of the issues at hand.