2004 (4) TMI 497 - AT - Central Excise

Summary

Issues: Valuation of goods sold to the domestic tariff area under the Central Excise Act.

In this case, the appellant, a 100% EOU engaged in manufacturing galvanized black pipes, sold goods in the domestic tariff area after paying Central Excise duty. The dispute arose regarding the valuation of these goods, with the authorities contending that the valuation should be based on the price of similar imported goods on a CIF basis, including freight and insurance. The appellant argued that the valuation method adopted was contrary to law and circulars issued by the Central Board of Excise and Customs.

The appellant highlighted Section 3 of the Central Excise Act, which states that the value of goods sold to the domestic tariff area should be determined in accordance with the provisions of the Customs Act, 1962, and the Customs Tariff Act, 1975. They argued that this provision does not authorize adding freight and insurance costs to the domestic sale price. The appellant referred to a circular dated 17-2-83, emphasizing that freight should not be added to arrive at the assessable value, as clarified in Para 14 of the circular.

Upon reviewing the arguments and records presented by both parties, the Tribunal found that the valuation ordered by the lower authorities was inconsistent with the circular issued by the Central Board. As a result, the duty demand based on this valuation method was deemed unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.