2004 (11) TMI 394 - AT - Central Excise

Summary

Issues Involved: Stay order modification, waiver of pre-deposit, interpretation of legal judgments on value addition outside the factory, relevance of circulars issued by CBEC, recall of stay order, assessment of assessable value.

Stay Order Modification:
The appellants sought modification of a stay order requiring them to pre-deposit Rs. 1.30 crores within four months. They moved the High Court seeking liberty to apply for full waiver. The High Court allowed them to seek modification of the stay order. The Revenue filed their comments.

Waiver of Pre-Deposit:
The Senior Counsel argued that the Tribunal's decision was based on a Supreme Court judgment regarding value calculation. He highlighted a circular stating that the judgment did not allow charging duty on value addition outside the factory. This point was not raised during the initial proceedings. The Senior Counsel requested full waiver of pre-deposit due to a strong prima facie case in favor of the appellants.

Interpretation of Legal Judgments on Value Addition:
The Senior Counsel referenced a Supreme Court judgment and a circular by the Board regarding the calculation of value for duty purposes. He argued that the Board's circular clarified that duty cannot be charged on value addition outside the factory. This interpretation was binding on the Department until withdrawn. The Senior Counsel contended that this point was not considered during the initial proceedings.

Recall of Stay Order:
Upon careful consideration, the Tribunal noted that the stay order was based on a Supreme Court judgment without considering the Board's clarifying circular. Citing another Supreme Court judgment, the Tribunal accepted the Senior Counsel's plea for recall of the stay order. The Tribunal recalled the stay order, granted full waiver of pre-deposit, and stayed the recovery of the amount until the appeal's disposal.

Assessment of Assessable Value:
The Revenue defended the Tribunal's initial decision based on the Supreme Court judgment regarding the assessable value. They argued that the value of processing guniting should be added to the assessable value. However, the Tribunal, after considering the Board's circular and another Supreme Court judgment, decided in favor of the appellants, recalling the stay order and granting full waiver of pre-deposit until the appeal's final hearing.

The Tribunal, after considering the arguments presented by both parties, recalled the stay order requiring the appellants to pre-deposit Rs. 1.30 crores. This decision was based on the clarification provided in a circular by the Board, which stated that duty cannot be charged on value addition outside the factory premises. The Tribunal granted full waiver of the pre-deposit amount and stayed its recovery until the final hearing of the appeal. This judgment highlighted the importance of considering all relevant legal interpretations and circulars in determining the assessable value for duty purposes.