2004 (1) TMI 417 - AT - Central Excise

Summary

Issues:
Confirmation of duty based on cost construction of printing and wrapping materials without considering the cost of ink. Rejection of evidence provided by appellants, including Chartered Accountant's certificate and affidavits, by the Commissioner.

Confirmation of Duty Based on Cost Construction:
The appellants, manufacturers of various materials, were consuming printing and wrapping materials obtained from job workers. The department initiated proceedings under Rule 6(b) of the Central Excise (Valuation) Rules, 1975, to add the cost of ink in the assessable value of the raw materials. The Commissioner confirmed the duty, stating that the cost of ink was not included in the cost of raw materials. The appellants provided a certificate from a Chartered Accountant and affidavits from job workers to prove that the ink cost was included in the value. However, the Commissioner rejected this evidence, citing lack of detailed breakdown of ink cost and discrepancies in dates of affidavits.

Rejection of Evidence by Commissioner:
Upon hearing both parties and examining the evidence, the Tribunal found that the matter needed to be sent back to the original authority for fresh consideration. The Chartered Accountant's certificate clearly stated that ink cost was part of the conversion charges paid to job workers. The Tribunal noted that no show cause notice was issued to appellants to provide a split-up of ink cost, which could have been easily verified. The rejection of affidavits based on technicalities like dates was deemed unjustified. The Tribunal directed the original authority to re-scrutinize the evidence, allowing appellants to present further details and documents. The de novo proceedings were to be completed within six months, considering appellants' plea of time bar as well. The Commissioner was instructed to review all grounds raised by appellants during the fresh consideration, ultimately allowing the appeal by remanding the case.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, CHENNAI highlights the issues of duty confirmation based on cost construction and the rejection of evidence by the Commissioner. The Tribunal emphasized the need for a fresh examination of the evidence, ensuring a fair opportunity for the appellants to substantiate their claims. The decision to remand the case for de novo consideration aims to address the discrepancies in the initial assessment and provide a more thorough review of the facts presented by the appellants.