2002 (8) TMI 374 - AT - Central Excise

Summary

Issues:
1. Challenge to the order of the Commissioner of Central Excise (Appeals) rejecting contentions based on Ujagar Prints case.
2. Discrepancy in assessable value of goods manufactured in Unit No. 1 and Unit No. 2.
3. Imposition of penalty and rejection of appellant's contentions by the Assistant Commissioner.
4. Applicability of principles from Kandivali Metal Works and J.R. Fabricators cases.
5. Inclusion of brand name value in assessable value.
6. Justification for following Ujagar Prints case in determining assessable value.

Analysis:
1. The appeal challenges the Commissioner's order rejecting contentions relying on the Ujagar Prints case. The appellant argued that duty demand should align with the Ujagar Prints decision, which the Commissioner did not follow, leading to a dispute over duty assessment.

2. The dispute arose from the variance in assessable values of paints manufactured in Unit No. 1 and Unit No. 2. The appellant followed Ujagar Prints principles in determining assessable value for Unit No. 2, incorporating raw material costs, packing charges, and job work charges with profit margins. However, the Department issued a show cause notice alleging a lower assessable value for Unit No. 2 compared to Unit No. 1.

3. The Assistant Commissioner upheld the duty demand and imposed a penalty, despite the appellant's arguments citing profit differentials between Unit No. 1 and Unit No. 2. The appellant contended that following Ujagar Prints guidelines should preclude application of Rule 6(a) of the Valuation Rules, supported by references to relevant cases.

4. During the proceedings, the Departmental Representative questioned the absence of brand name value in the assessable value calculation, a point not raised earlier. The Tribunal rejected this new contention, emphasizing that such issues should have been raised in the show cause notice.

5. The Tribunal acknowledged the appellant's adherence to the Ujagar Prints case for assessable value determination, emphasizing that the Department cannot invalidate this approach based on higher values in Unit No. 1, where direct manufacturing occurs.

6. Ultimately, the Tribunal set aside the Commissioner's order, ruling in favor of the appellant based on the consistent application of Ujagar Prints principles in determining the assessable value. The appeal was allowed, highlighting the importance of following established legal precedents in taxation matters.