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2005 (8) TMI 414 - AT - Central Excise
Issues: Valuation of goods for duty calculation based on discounts claimed by job workers for a company.
In the judgment by the Appellate Tribunal CESTAT, Mumbai, the appellants, who are job workers for a company, were discharging duty based on the price list of the company and claiming discounts. The dispute centered around the deduction on account of cash and product discounts offered by the company, in this case, M/s. Asian Paints. The Tribunal noted that the assessable values cannot be determined based on the trader's selling price, as the valuation has to be in accordance with the formula approved by the Constitutional Bench in the case of Ujjagar Prints. The Tribunal emphasized that if the trader's selling price, after deducting certain claims, is not less than the assessable value calculated as per the Ujjagar Prints formula, then the duty discharged based on that value cannot be challenged by the Revenue. The Tribunal further stated that there was no need to delve into the eligibility for various discounts or the case laws presented by both sides since the costing formula established in the Ujjagar Prints case had not been violated, and no evidence of duty being underpaid based on that formula was provided. The Tribunal highlighted that it was essential for the Revenue to demonstrate that the discounts granted had indeed reduced the assessable value below what was calculated according to the Ujjagar Prints formula. As this evidence was lacking, the appeal was allowed, and the impugned order was set aside. In conclusion, the judgment clarified the valuation principles for duty calculation concerning discounts claimed by job workers, emphasizing adherence to the formula established by the Constitutional Bench in the Ujjagar Prints case. The decision underscored the importance of ensuring that duty payment is based on the correct assessable value, as determined by the approved costing principles, and upheld the appeal due to the absence of evidence showing a breach of the prescribed valuation methodology.
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