2003 (8) TMI 261 - AT - Central Excise

Summary

Issues: Valuation of pattern tooling manufactured by the appellant.

Analysis:
1. The appellant, engaged in manufacturing pattern, jigs, and fixtures, challenged the order-in-appeal related to the valuation of pattern tooling. The dispute arose when the appellant supplied pattern tooling to another company for the manufacture of castings for tractors and vehicles.

2. The appellant received a show cause notice alleging that the appellant and the other company were sister concerns, and the value of the goods should be based on costing declared by the noticees plus a notional profit. The appellant argued against this, stating that the prices at which the goods were sold to the other company were not sale prices to independent buyers. The original and appellate authorities rejected the appellant's contention and confirmed the demand for duty.

3. The Tribunal observed that there was no evidence to support the claim that the appellant and the other company were related persons, and therefore, the transaction between them could not be treated as a sale. The Tribunal concluded that the prices received by the appellant from the other company should be considered for valuation purposes under Section 4(1)(a) of the Central Excise Act, and there was no justification to apply Rule 6(b)(ii) of the Central Excise (Valuation) Rules.

4. Consequently, the Tribunal set aside the impugned order, allowing the appeal of the appellant. The appellant was granted all consequential reliefs, including a refund of the deposit made during the appeal hearing before the Commissioner (Appeals).