2010 (2) TMI 1012 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty based on the inclusion of cost of services in the assessable value of manufactured goods.

Analysis:
The appellants filed an application seeking waiver of pre-deposit of duty amounting to Rs. 61,01,557/- and an equal penalty. The demand was confirmed due to the appellants allegedly not considering the cost of services in the assessable value of the goods. The appellants argued that prior to 2001, they separately showed the cost of services, verified by a Cost Accountant. Subsequently, they prepared their cost as per CAS-4, including costs of services like power, water, and furnace oil in materials consumed and direct expenses. They presented a verified format of CAS-4 to support their claim that the cost of service was part of the assessable value, hence challenging the sustainability of the demand.

The Revenue contended that the appellants' stock reflected the cost of service separately, justifying the demand. However, upon examination, it was found that as per CAS-4, the appellants had indeed submitted a format detailing the cost of services separately, including items like water, electricity, and furnace oil, which were factored into the assessable value of the goods. Consequently, it was observed that the appellants had a valid case, as the cost of service was integrated into the assessable value. Therefore, the Tribunal decided to grant the waiver of pre-deposit of duty and penalty, staying the recovery process during the appeal's pendency. The stay petition was allowed, providing relief to the appellants.

In conclusion, the Tribunal's decision was based on the acknowledgment that the cost of services was appropriately included in the assessable value of the goods as per CAS-4, leading to the waiver of pre-deposit of duty and penalty for the appellants.