2011 (3) TMI 1494 - AT - Central Excise

Summary

Issues:
Valuation aspect of goods manufactured by appellants under Rule 8 of Central Excise Valuation Rules, 2000 vs. contention based on Ujagar Prints case and Board Circular No. 619/10/2002-CX; Interpretation of Rule 10A for valuation of goods manufactured by job worker; Prima facie observations on statutory provisions overriding Board circular or Court decision for valuation disputes.

Analysis:
The appeal in question arose from a Commissioner's order confirming a duty demand of Rs. 73,81,722/- along with interest and penalty for the period from April 2007 to December 2008. The dispute centered around the valuation aspect of goods manufactured by the appellants for M/s. Procter & Gamble Home Products Limited on a job work basis. The department relied on Rule 8 of the Central Excise Valuation Rules, 2000, while the appellants argued that the valuation should be governed by the decision in the Ujagar Prints case and Board Circular No. 619/10/2002-CX.

Upon examination of the impugned order, it was noted that the Commissioner rejected the appellants' contentions, citing Rule 10A of the Central Excise Valuation Rules. Rule 10A specifically addresses the valuation of goods manufactured by a job worker, outlining different scenarios for valuation. The rule provides that if the circumstances do not fall under the first two clauses, valuation should be in accordance with preceding rules. It was highlighted that Rule 10A was not in force at the time of the Board circular, which meant the statutory provision would override any earlier circular or court decision on valuation matters.

The Tribunal emphasized that when a statutory provision comprehensively addresses various circumstances and includes a residuary clause, any attempt to rely on a Board circular or court decision for valuation, ignoring the applicable statutory provisions, would not be permissible. The Tribunal made prima facie observations that there was no case for a total waiver of the demanded amount under the impugned order. Consequently, the appellants were directed to deposit Rs. 45 lakh within eight weeks, with the balance amount of duty, interest, and penalty being waived until the appeal's disposal. These directions were given for compliance by a specified date.