2005 (2) TMI 559 - AT - Central Excise

Valuation (Central Excise) - Transportation charges - Demand - Limitation - Extended period - Invocation of

Summary

Issues:
1. Determination of assessable value of Acid slurry manufactured on job work basis.
2. Whether the demand of duty is within the time limit specified in Section 11A of the Central Excise Act.

Analysis:
1. The appeal involved the determination of the assessable value of Acid slurry manufactured on job work basis by M/s. Nirma Ltd. The appellant argued that they followed the price declaration given by the principal manufacturer and paid duty accordingly. They contended that the extended period of limitation for demanding duty was not applicable as there was no evidence of deliberate intention to evade payment. The appellant also raised issues regarding the consideration of actual freight, discounts on raw materials, profit margin, and sale realization of spent acid. The Departmental Representative argued that additional considerations like spent acid should be included in the assessable value. The Tribunal agreed with the Department's representative, emphasizing the guidelines set by the Supreme Court in Ujagar Prints for determining the assessable value of goods manufactured on job-work basis.

2. Regarding the time limit specified in Section 11A of the Central Excise Act, the Departmental Representative argued that the extended period of limitation was applicable as the assessable value declared by the appellant was deliberately kept low. The Tribunal concurred, stating that the facts known to the appellants were suppressed, justifying the invocation of the extended period of limitation. The Tribunal also upheld the imposition of penalty and interest on the appellants, directing the Adjudicating Authority to recompute the duty based on their findings. The judgment concluded by disposing of the appeal in favor of the Department, with instructions for the reevaluation of duty, penalty determination, and interest calculation.

This detailed analysis of the judgment highlights the key arguments presented by both parties, the application of legal principles, and the final decision rendered by the Tribunal on the issues of assessable value determination and the time limit for demanding duty.