2012 (8) TMI 921 - AT - Central Excise

Valuation - includibility - bullet-proofing charges - job-work - Revenue is demanding duty after adding the bullet-proofing charges to the assessable value of the Jeep on the ground that the order received for Bullet Proof Jeep and the appellants supplied the same

Summary

Issues:
- Demand of duty confirmed and penalty imposed under Rule 25 of Central Excise Rules, 2002.
- Whether the duty is payable on the Bullet Proof Jeep or the base vehicle.
- Interpretation of legal provisions regarding the assessment of goods at the place of removal.
- Application of previous tribunal decisions and circulars in similar cases.

Analysis:
1. Demand of Duty and Penalty:
The appellant appealed against an order confirming the duty demand and imposing a penalty under Rule 25 of Central Excise Rules, 2002. The Revenue claimed duty on the Bullet Proof Jeep by adding bullet-proofing charges to the assessable value, arguing that the appellants received an order for Bullet Proof Jeep and supplied the same. The appellants contested this demand based on a previous tribunal decision in their favor.

2. Assessment of Duty:
The Revenue relied on the Supreme Court's decision in Siddhartha Tubes Ltd. v. Commissioner of Central Excise to assert that duty is payable on the value addition to the base vehicle, i.e., the cost of bullet-proofing. However, the tribunal referenced a circular clarifying that duty cannot be charged on value addition outside the factory of clearance for processes not amounting to manufacture by an independent job worker.

3. Interpretation of Legal Provisions:
The tribunal analyzed the legal provisions related to the assessment of goods at the place of removal. It highlighted the requirement for separate registration certificates for each premise of a manufacturer and emphasized that goods must be assessed at the place of removal. The tribunal also provided a hypothetical example to illustrate the assessment process in cases involving multiple divisions of a company.

4. Application of Previous Decisions and Circulars:
The tribunal referred to a previous decision involving a similar issue where the value addition post-clearance by a job worker was not considered for duty assessment. The Commissioner (Appeals) also cited a circular stating that duty cannot be charged on value addition outside the factory of clearance for processes not amounting to manufacture by an independent job worker. The tribunal upheld the Commissioner's decision, dismissing the appeal based on the previous tribunal decision and the circular's guidance.

In conclusion, the tribunal set aside the impugned order and allowed the appeal based on the application of previous decisions, legal provisions, and circulars clarifying duty assessment in cases involving value addition by independent job workers outside the factory of clearance.