2004 (5) TMI 401 - AT - Central Excise

Summary

Issues Involved:
1. Classification of Bonding Gum/Repair Gum.
2. Determination of aggregate value of clearance under Notification No. 19/95-C.E., dated 16-3-95.
3. Eligibility for concessional rate of duty under Notification No. 1/93-C.E., dated 28-2-93.
4. Computation of differential duty and cum-duty price.

Issue-wise Detailed Analysis:

1. Classification of Bonding Gum/Repair Gum:
The appellants filed a classification list effective from 18-10-94, claiming exemption under Notification No. 18/94-C.E. for items under sub-heading 4006.10. The Assistant Commissioner disallowed the concessional rate for Bonding Gum and Repair Gum, stating they were not specified in the notification. Consequently, the appellants reclassified Bonding Gum under sub-heading 4006.90 and claimed exemption under Notification No. 1/93-C.E. The Tribunal found that Bonding Gum/Repair Gum, not specified under sub-heading 4006.10, should fall under sub-heading 4006.90, making them eligible for SSI exemption under Notification No. 1/93. Thus, the demand of Rs. 1,76,853/- was not sustainable.

2. Determination of Aggregate Value of Clearance:
The appellants argued that the assessable value for depot and factory gate sales should be re-determined, excluding Bonding Gum/Repair Gum from the aggregate value under Notification No. 19/95. The Tribunal held that the assessable value declared by the appellants and on which duty was paid without dispute could not be re-opened. The Commissioner (Appeals) correctly included the value of Bonding Gum/Repair Gum in the aggregate value of clearances under Notification No. 19/95, as per Explanation II of the notification. Thus, the duty demand of Rs. 4,41,844/- was upheld.

3. Eligibility for Concessional Rate of Duty:
The appellants claimed concessional duty for goods under Notification No. 19/95 and filed classification declarations accordingly. The department reclassified Bonding Gum/Repair Gum under sub-heading 4006.10, denying the exemption and clubbing their clearance value with other products. However, the Tribunal found that Bonding Gum/Repair Gum, falling under sub-heading 4006.90, was eligible for SSI exemption under Notification No. 1/93. Consequently, the demand of Rs. 1,76,853/- was set aside.

4. Computation of Differential Duty and Cum-duty Price:
The appellants contended that if liable for differential duty, it should be computed on cum-duty price principles. The Tribunal noted that since the assessable value was accepted and declared by the appellants without dispute, they could not now claim that the additional demand be taken as cum-duty price. Hence, the decisions relied upon by the appellants for cum-duty price were not applicable.

Conclusion:
The Tribunal modified the Commissioner (Appeals) order, holding that Bonding Gum/Repair Gum should be classified under sub-heading 4006.90 and eligible for SSI exemption under Notification No. 1/93. The demand of Rs. 1,76,853/- was set aside, but the rest of the order, including the duty demand of Rs. 4,41,844/-, was upheld. The appeal was disposed of accordingly.