2007 (4) TMI 35 - AT - Central Excise

Valuation(Central Excise) Alleged that the bought out item Alcopanel used in the manufacture of aluminium doors and window structure are includible in the assessable value Held that the value of alcopanel not includible in the assessable value of aluminium doors

Summary

Issues:
Inclusion of value of bought out item 'Alco panel' in assessable value; Time limitation for Show Cause Notice; Application of longer period for demanding duty; Interpretation of self-assessment scheme under Section 4 of the Central Excise Act, 1944; Merits of the case regarding the bought out item 'Alcopanel' becoming part of immovable property.

Inclusion of value of bought out item in assessable value:
The appeal was filed by Revenue against the Order-in-Appeal regarding the inclusion of the value of the bought out item 'Alco panel' in the assessable value. The Original Authority confirmed a demand, including interest and penalties, which the Commissioner (Appeals) set aside due to limitation of time. Revenue contended that the assessee is responsible for determining the assessable value under the self-assessment scheme. The Show Cause Notice was issued in 2004 for a period of dispute starting in 2001. The Tribunal found that there was no evidence of willful suppression by the assessee to invoke a longer period for demanding duty. The Tribunal also referenced a previous case where bought out items becoming part of immovable property were excluded from assessable value, supporting the respondent's case.

Time limitation for Show Cause Notice:
The Commissioner (Appeals) set aside the Original Authority's decision due to the Show Cause Notice being hit by limitation of time. Revenue argued that the facts were revealed by the respondent during an audit, and a letter was written after an audit party requested details. However, the Show Cause Notice did not allege willful suppression by the assessee to evade duty. The Tribunal held that without evidence of willful suppression, the longer period for demanding duty could not be invoked, citing a Supreme Court decision for support.

Application of longer period for demanding duty:
Revenue contended that the longer period for demanding duty should be invoked as the department was made aware of the bought out item by the respondent only during an audit. However, the Tribunal found that the Show Cause Notice lacked allegations of willful suppression by the assessee, which is necessary to invoke the longer period. The Tribunal referenced a Supreme Court decision to support this finding.

Interpretation of self-assessment scheme under Section 4:
Revenue argued that under the self-assessment scheme, it is the responsibility of the assessee to determine the assessable value. The Commissioner (Appeals) was criticized for not appreciating that the facts were revealed by the respondent during an audit. However, the Tribunal found that without evidence of willful suppression, the longer period for demanding duty could not be invoked, and the appeal was rejected.

Merits of the case regarding bought out item becoming part of immovable property:
The Tribunal found that the bought out item 'Alcopanel' was assembled at the site along with other structures, becoming part of the immovable property. Citing a previous case where bought out items becoming part of immovable property were excluded from assessable value, the Tribunal upheld the decision of the Commissioner (Appeals) and rejected Revenue's appeal.

(Operative portion of this order was pronounced in open Court on conclusion of hearing)