2005 (3) TMI 675 - AT - Central Excise

Summary

Issues: Valuation of PCB sub-assemblies for central excise duty, application of costing rules, contestation of demand on bar of limitation.

In this case, the main issue revolves around the valuation of PCB sub-assemblies cleared to a TV manufacturer on a sale basis, subsequently repurchased as complete TV sets. The lower authority denied valuation under Section 4(1)(a) of the Central Excise Act, leading to a contestation by the appellants. The appellate tribunal found that the sale of PCB sub-assemblies for eventual repurchase as complete TV sets cannot be considered a normal sale, and thus, Section 4(1)(a) valuation does not apply. The tribunal directed the valuation to be determined under appropriate valuation rules rather than Rule 6(b)(2) based on costing data, which was not in accordance with the prescribed circular. The case was remitted back to the original authority to re-determine the cost following the circular and apply the correct costing rule for valuation.

Furthermore, the appellants contested the application of the costing rule and the demand on the bar of limitation, which were not addressed by the tribunal. The tribunal ordered a remand with directions to keep the application of the appropriate valuation rule and the bar of limitation open for both sides in the de novo proceedings. It was clarified that the plea of valuation under Section 4(1)(a) cannot be re-agitated in the new proceedings. Ultimately, the appeal was allowed on the specified terms, and the application was disposed of accordingly.