2010 (3) TMI 1052 - AT - Central Excise

Summary

Issues:
1. Liability to pay differential duty under Rule 10A of Central Excise Valuation Rules or Section 4 of Central Excise Act.

Analysis:
The judgment pertains to two stay petitions filed for the waiver of pre-deposit of duty and penalty amounts in two separate appeals. The duty and penalty amounts were confirmed against the appellant, a job worker, for not discharging duty liability based on the value of finished goods cleared. The appellant had followed a duty calculation formula from a Supreme Court case, leading to a differential duty for the period November 2007 to September 2008.

The appellant argued that the duty was demanded under Rule 10A of the Central Excise Valuation Rules, contending that the rule applies only when raw materials are entirely supplied by the principal manufacturer. They claimed to have purchased additional raw materials independently for body building on chassis, which they considered as manufacturing activity under the Central Excise Tariff Act. The appellant asserted that the assessable value was determined by adding the price of body and chassis, and the sale to the principal manufacturer constituted a transfer of possession, on which sales tax was paid.

On the contrary, the Jt. CDR relied on a Final Order and a circular to support the demand for assessable value based on the value at which the principal manufacturer sells goods to customers. The Tribunal acknowledged the contentious issue and the cited decision favoring the Revenue. Consequently, the Tribunal directed the appellant to pre-deposit the entire confirmed duty amount within twelve weeks and stay the recovery of the balance penalty and interest pending appeal disposal.

In conclusion, the Tribunal's decision focused on the interpretation of relevant provisions concerning differential duty calculation under Rule 10A versus Section 4. The appellant's arguments regarding the manufacturing process, assessable value determination, and tax payments were considered against the Revenue's position supported by legal precedents. The order highlighted the need for detailed consideration of the law and directed pre-deposit pending appeal resolution, balancing the interests of both parties.