2006 (1) TMI 438 - AT - Central Excise

Summary

Issues: Valuation of goods manufactured by a job worker on behalf of Principals, pre-deposit of duty, application of previous judgments, stay application without pre-deposit.

In this judgment by the Appellate Tribunal CESTAT, Bangalore, the issue revolved around the valuation to be adopted for goods manufactured by a job worker on behalf of Principals. The appellants argued that they were manufacturing the goods at arm's length and were not related persons, thus the value adopted by the job worker should be considered, not the value at which the goods were sold by the Principals. The counsel referred to previous judgments by different Benches and the Apex Court, emphasizing that the value declared by the job worker should be accepted. The Tribunal had previously held that in the absence of allegations of clubbing clearances and the job worker being unrelated, the job worker's valuation should be accepted.

The Department, represented by the learned DR, mentioned that the Tribunal's ruling in a specific case had been appealed by the Department, but the appeal had not resulted in a stay of the Tribunal's order. The DR requested an out-of-turn hearing for the appeal. Upon careful consideration, the Tribunal found that the issue was well-settled based on previous judgments. It reiterated that the value cleared by the job worker should be adopted for assessment when there were no allegations of clubbing clearances and the job worker was not related. Since the job worker in this case was not related to the Principals, the cited judgments applied. The Tribunal cited a Karnataka High Court Division Bench case and an Apex Court case to support the view that if the appellants demonstrated that their appeal should be allowed based on previous judgments, they were not required to make a pre-deposit.

Therefore, the Tribunal allowed the stay application without directing the appellants to pre-deposit, granting full waiver and staying the recovery till the appeal's disposal. The Tribunal scheduled the matter for final hearing on a specific date due to the significant revenue involved. The judgment highlighted the importance of demonstrating that the appeal should be allowed based on the facts of the case to avoid pre-deposit requirements, in line with established legal principles and previous decisions.