2003 (9) TMI 572 - AT - Central Excise

Summary

Issues:
1. Correct assessable value of goods for duty calculation.
2. Application for waiver of pre-deposit of duty and penalty.

Analysis:

Issue 1: Correct assessable value of goods for duty calculation
The case involved the applicants engaged in manufacturing P&P medicines for loan licensees, transferring goods as stock transfer to the licensees' depot. The dispute arose regarding the assessable value of the goods for duty calculation. The department contended that the assessable value should be the selling price of the licensees, not the price paid by them to the applicants. Show cause notices were issued for recovery of duty, confirmed by the adjudicating authority with a penalty equal to the duty amount. The applicants sought waiver of pre-deposit based on the grounds that they were job workers considered as manufacturers, and the factory gate was deemed as such. The Tribunal, after considering the Apex Court judgment in Ujagar Prints, determined that the assessable value computed for the 'deemed' sale was covered by Section 4(1)(a) of the Central Excise Act, not Section 4(1)(b). Consequently, the Tribunal found a strong prima facie case in favor of the applicants and waived the pre-deposit of duty and penalty, staying the recovery pending appeal.

Issue 2: Application for waiver of pre-deposit of duty and penalty
The applicants, facing duty recovery and penalty, sought waiver of pre-deposit. The Tribunal, after hearing both parties, analyzed the nature of the transactions and the legal provisions applicable. Considering the applicants as job workers deemed as manufacturers, the Tribunal applied the provisions of Section 4(1)(a) of the Central Excise Act instead of Section 4(1)(b) as done by the adjudicating authority. This interpretation led the Tribunal to conclude that a strong prima facie case existed in favor of the applicants