2007 (1) TMI 38 - AT - Central Excise

Valuation (Central Excise) Assessee s contended that printing charges can t be added in the assessable value Authority after considering all the detail find assessee contention is right.

Summary

Issues:
1. Whether printing charges can be added to the assessable value.
2. Whether the impugned order was passed in violation of natural justice.
3. Whether the process of printing on coated paper board amounts to a process of manufacture.
4. Whether the judgment cited by Revenue in appeal memo is applicable.

Analysis:

Issue 1 - Printing Charges in Assessable Value:
The case revolves around the inclusion of printing charges in the assessable value. The Commissioner (A) accepted the assessee's plea that printing charges should not be added as the printing work was done by separate printers outside their premises post clearance. The Tribunal ruling in the case of ITC Ltd. v. CCE, Chennai was applied to support this decision. The Appellate Tribunal found that the accounting treatment of the printing charges was in line with the appellant's claim. The judgment emphasized that the printing activity did not amount to a process of manufacture, as established in previous cases. Consequently, the impugned order was set aside, and the appeal was allowed.

Issue 2 - Violation of Natural Justice:
The Appellate Tribunal noted a violation of natural justice in the impugned order due to the absence of proper notice to the appellant before confirming the demand. Despite this procedural flaw, the Tribunal proceeded to examine the merits of the case to avoid prolonged litigation. The Tribunal found that the demand should have been processed with the appellant's involvement, as per the principles of natural justice.

Issue 3 - Process of Printing as Manufacture:
The judgment extensively discussed whether the process of printing on coated paper board constituted a process of manufacture. Citing relevant precedents, the Tribunal concluded that printing on the coated paper did not amount to a manufacturing process. The classification of the printed paper board under Chapter Heading No. 4901.90 was upheld based on previous judgments and the nature of the printing activity involved.

Issue 4 - Applicability of Revenue's Citation:
The Revenue contended that printing charges should be intrinsic to the product's commercial value, citing a judgment by the Apex Court. However, the Tribunal differentiated the present case from the cited judgment, emphasizing that the printing activity was conducted by separate printers post-clearance and did not add intrinsic value to the product. The Tribunal rejected the Revenue's appeal, affirming the Commissioner (A)'s decision and the Tribunal ruling cited in the impugned order.

In conclusion, the Appellate Tribunal upheld the decision to exclude printing charges from the assessable value, citing precedents and the nature of the printing process involved. The judgment highlighted the importance of natural justice in such proceedings and clarified the distinction between manufacturing processes and post-clearance activities conducted by separate entities.