1986 (5) TMI 266 - AT - Central Excise

Summary

Issues Involved:
1. Valuation of BSC brand shoes.
2. Valuation of Bata brand shoes.
3. Admission of additional evidence by respondents.
4. Applicability of Section 4 of the Central Excises & Salt Act for valuation.
5. Commercial recognition of Bata and BSC brand shoes as separate categories.
6. Impact of brand names on the assessment of goods.

Detailed Analysis:

1. Valuation of BSC Brand Shoes:
The appellants did not contest the valuation of BSC brand shoes under Section 4(1)(a) read with Section 4(2) of the Central Excises & Salt Act, following the Supreme Court's decision in the Bombay International Tyres case (1983 E.L.T. 1986).

2. Valuation of Bata Brand Shoes:
The primary issue was the valuation of Bata brand shoes. The appellants argued that Bata and BSC brand shoes are identical in quality and price, differing only in brand names, and should be valued similarly under Section 4. The respondents contended that the Bata and BSC brand shoes are recognized commercially as separate categories and should be valued independently.

3. Admission of Additional Evidence by Respondents:
The respondents attempted to introduce additional evidence to show that Bata brand shoes are sold in wholesale lots to independent buyers. However, this evidence was not contemporaneous and was not presented before the lower authorities. The Tribunal rejected the request for admission of additional evidence, stating it could not be allowed to enhance the respondents' claim.

4. Applicability of Section 4 of the Central Excises & Salt Act for Valuation:
The Tribunal examined whether the Bata and BSC brand shoes could be considered "such goods" for the purpose of Section 4. It was noted that before the new Section 4's introduction, both brands were assessed at the same value. The Tribunal referred to the Supreme Court's interpretation in the Bombay Tyre International case, which maintained that the object and purpose of the new Section 4 remained the same as the old Section 4.

5. Commercial Recognition of Bata and BSC Brand Shoes as Separate Categories:
The respondents argued that Bata and BSC brand shoes are known in the market as separate categories. However, no evidence was provided to support this claim. The Tribunal noted that affixing different brand names does not change the character of the goods for assessment purposes. The Supreme Court's ruling in the Food Specialities case was cited, stating that affixing a brand name does not amount to manufacturing a new product unless explicitly defined by law.

6. Impact of Brand Names on the Assessment of Goods:
The Tribunal concluded that affixing a brand name does not result in the manufacture of different categories of goods. The commercial parlance criterion used for classification cannot be applied to Section 4 for valuation purposes. The Tribunal held that the wholesale price for BSC brand shoes should be applicable to Bata brand shoes for assessment under Section 4. The Tribunal emphasized that neither party provided sufficient evidence to show any disadvantage due to the valuation method applied.

Conclusion:
The Tribunal ruled that the wholesale price for BSC brand shoes is applicable to Bata brand shoes for valuation under Section 4 of the Central Excises & Salt Act. The request for additional evidence by the respondents was denied, and the commercial recognition argument was not substantiated with evidence. The Tribunal emphasized the consistency in valuation principles before and after the introduction of the new Section 4.