2005 (12) TMI 413 - AT - Central Excise

Summary

Issues:
- Provisional assessment of duty under Rule 7 of the Central Excise Rules, 2001 for items fitted with covers at depots.
- Inclusion of value of stitched covers in the assessable value of mattresses sold at depots.
- Interpretation of Board's circulars and clarifications regarding the assessable value of mattresses with covers.

Provisional Assessment Issue:
The appeal was filed against an Order-in-Original (OIO) confirming a differential duty amount for the period from 1-7-2001 to 31-12-2001. The appellant sought provisional assessment under Rule 7 of the Central Excise Rules, 2001 for clearances where items would be fitted with covers made at their depots. The Deputy Commissioner applied a new Section 4 and held that the value of stitched covers should be included in the assessable value, confirming the differential duty. The Commissioner (A) rejected the appeal, stating the appellant's submissions were inconsistent. The Tribunal upheld the impugned order, emphasizing the transaction value concept under Section 4(d) and Board's clarification on transaction value.

Inclusion of Stitched Covers Issue:
The appellant argued that the value of stitched covers should not be included in the assessable value of mattresses sold at depots, citing Board's clarifications from Nov. 1987. They invoiced covers separately based on customer specifications. The Tribunal noted that when mattresses were sold with covers from depots, the transaction value included the covers' value. The Tribunal held that the transaction value comprised the plain mattress value plus stitched covers, irrespective of separate invoicing. The Tribunal rejected the appellant's contention, upholding the impugned order based on the relevance of transaction value and Board's clarifications.

Interpretation of Board's Circulars Issue:
The Tribunal analyzed the Board's circular from Nov. 1987, emphasizing that when goods were cleared with covers, the cover cost should be included in assessable value. The Tribunal highlighted the significance of the transaction value concept and Board's clarification from 30-6-2000. It concluded that the inclusion of stitched covers' value in the transaction value for mattresses sold at depots was consistent with the Board's circular and transaction value definition. The Tribunal found no merit in the appellant's argument to exclude covers' value for assessment, ultimately upholding the impugned order.

The Tribunal's decision was pronounced on 30-12-2005, affirming the Commissioner (A)'s rejection of the appeal and emphasizing the importance of transaction value and Board's clarifications in determining the assessable value of mattresses sold with covers at depots.