2013 (12) TMI 1499 - AT - Central Excise

Summary

Issues involved: Determination of assessable value for Central Excise duty on goods manufactured by job worker for Cadbury India Ltd., inclusion of post-manufacturing expenses in the declared price, waiver of pre-deposit and stay against recovery.

Assessable value determination: The appellants, engaged in manufacturing chocolates for Cadbury India Ltd. as a job worker, filed declarations for assessment under Rule 10A of Central Excise Valuation Rules. The Department disputed the declared price, claiming it did not include certain elements like Octroi, transportation charges, and cheque discounting charges. Recovery proceedings were initiated based on actual costs, proposing duty collection on the differential value.

Inclusion of post-manufacturing expenses: Impugned orders held that post-manufacturing expenses are not deductible under Section 4 of the Central Excise Act, 1944. The Department argued that the appellants did not cooperate, failing to provide necessary details despite summonses and letters. However, the appellants cited communication from Cadbury India Ltd. specifying excluded items and contended that the demand quantification was based on details provided.

Waiver of pre-deposit and stay against recovery: The learned counsel pointed out a previous Tribunal decision granting unconditional waiver of pre-deposit in a similar case. The Department argued against following the precedent due to lack of cooperation from the appellants and Cadbury India Ltd. The Tribunal emphasized the need for verification by the Department regarding the prices at which goods were sold by Cadbury India Ltd. and concluded that the job worker cannot be expected to conduct such investigations. Consequently, the Tribunal decided to grant waiver of pre-deposit and stay against recovery during the appeal process, following the precedent decision.