2004 (4) TMI 348 - AT - Central Excise

Summary

Issues:
1. Inclusion of Ion and Gold plating charges in the assessable value of goods.
2. Whether the process of Ion/Gold plating amounts to manufacture.
3. Applicability of Central Excise rules regarding valuation of goods.

Issue 1: Inclusion of Ion and Gold plating charges in the assessable value of goods:
The appellants contended that they believed they were not required to include Gold plating/Ion plating charges in the assessable value of watch cases as the charges were paid by the clients directly to the job worker. They argued that since they did not incur expenses for plating and the cost of manufacture was fixed, they were not liable to pay duty on such charges. The appellants also cited precedents to support their case. The Commissioner found that the plating charges were not included in the assessable value as the watch cases could serve their purpose without plating, and the primary manufacturer had considered all input costs including plating charges in the assessable value. Consequently, the Commissioner set aside the lower authority's order and penalty, as there was no intention to evade duty.

Issue 2: Whether the process of Ion/Gold plating amounts to manufacture:
The Department argued that the process of Gold plating is a process of manufacture, and its value should be added to the assessable value. They relied on a circular and judgments to support their stance. However, the Commissioner found that the plating process did not amount to manufacture as the watch cases could be marketed without plating. The Commissioner also noted that the primary manufacturer had considered all input costs, including plating charges, in the assessable value, leading to no revenue loss. The Tribunal upheld the Commissioner's finding, citing relevant case laws and rejecting the Department's arguments.

Issue 3: Applicability of Central Excise rules regarding valuation of goods:
The Tribunal considered the legal position regarding the valuation of goods and the inclusion of certain processes in the assessable value. They noted that the Commissioner's finding was in line with the Apex Court judgments and previous tribunal decisions. The Tribunal held that the process of Ion/Gold plating did not amount to manufacture, and the primary manufacturer had already considered all input costs, including plating charges, in the assessable value. Therefore, the Tribunal rejected the appeals, upholding the Commissioner's decision.

In conclusion, the Tribunal dismissed the appeals, affirming that the process of Ion/Gold plating did not amount to manufacture and that the primary manufacturer had appropriately considered all input costs in the assessable value, leading to no revenue loss. The decision was based on legal principles and precedents established by the Apex Court and previous tribunal rulings.