2006 (1) TMI 529 - AT - Central Excise

Summary

Issues:
1. Appeal against demand confirmation and penalty imposition.
2. Treatment of traded items in total value of clearance.
3. Duty demand on job work goods.
4. Applicability of cum-duty price.

Analysis:

1. The appellant filed an appeal against the order-in-appeal confirming a demand of Rs. 3,16,342/- and imposing a penalty of Rs. One lakh. The appellant, engaged in manufacturing furniture items, argued that the Commissioner (Appeals) allowed benefits for traded items but still confirmed the demand. The contention was that traded items, being deemed duty paid, should not be included in the total value of clearance, and the duty in respect of traded items should be reduced from the total demand.

2. Regarding job work goods, the appellant contended that they only undertook repair works on existing furniture, as evidenced by the bills raised. The bills showed that only repair work was done, leading to the argument that duty demand in this regard was not sustainable.

3. The appellant also argued that the total value of clearance should be considered as cum-duty price, citing a decision of the Hon'ble Supreme Court in a specific case. The Commissioner (Appeals) acknowledged that demand for traded items should not be included in the total clearance value but did not reduce the duty demand accordingly. The Tribunal found merit in the appellant's contention, directing the adjudicating authority to recalculate the duty by excluding the value of traded items and repair charges from the total clearance value.

4. Consequently, the Tribunal set aside the penalty and instructed the adjudicating authority to reassess the penalty amount after providing an opportunity for the appellant to be heard. The appeal was disposed of by way of remand, emphasizing the need for a proper calculation of duty based on the exclusion of traded items and repair charges, as well as the application of cum-duty price principles.

This detailed analysis of the judgment addresses the issues raised by the appellant and the Tribunal's decision on each point, ensuring a comprehensive understanding of the legal reasoning and outcome of the case.