2007 (6) TMI 397 - AT - Central Excise

Summary

Issues:
1. Affirmation of demand of duty against the appellants for specific periods.
2. Inclusion of sale proceeds from waste and scrap in the assessable value of processed goods.
3. Comparison of Tribunal decisions regarding inclusion of sale proceeds in assessable value.
4. Requirement of pre-deposit by the appellants to challenge the demand.

Analysis:
1. The judgment deals with the affirmation of duty demand against the appellants for two specific periods by the ld. Commissioner (Appeals). The demand amounts to Rs. 58,560/- for one period and Rs. 35,512/- for another period. Penalties were also sustained on the appellants for the same periods.

2. The primary issue discussed in the judgment is the inclusion of sale proceeds from waste and scrap in the assessable value of processed goods supplied to the principal manufacturer by the appellants. The lower authorities argued that these sale proceeds should be considered as additional consideration and included in the assessable value. The Tribunal referred to the decision in Jay Engineering Works Ltd. v. Commissioner, which was upheld by the Supreme Court, supporting the view taken by the lower authorities.

3. The judgment also compares this decision with another Tribunal ruling in Lloyds Steels Industries Ltd. v. Commissioner, where similar sale proceeds were held to be not includible in the assessable value of processed goods. The Department had appealed against this decision, but the counsel argued that there was no stay on the operation of the Tribunal's decision in Lloyds Steels Industries. Given the conflicting decisions, the Tribunal directed the appellants to make a reasonable pre-deposit.

4. Consequently, the appellants were instructed to pre-deposit the duty amount within four weeks to challenge the demand. Compliance was to be reported by a specified date, with the possibility of waiver of pre-deposit and stay of recovery concerning the penalty amount upon due compliance. The judgment was dictated and pronounced in open court by Member (J) P.G. Chacko.