2007 (2) TMI 97 - AT - Central Excise

Valuation(Central Excise)- Appellant contended mere supply of goods as such without any manufacture does not amount to captive consumption - Held appellant contention is correct and accordingly determination of value by addition of 15% rejected

Summary

Issues: Valuation of goods under Rule 8 of Central Excise (Valuation) Rules, 2000; Applicability of penalty due to confusion in duty payment during corporatization.

In this case, the appellant, a telecommunication company, contested the valuation of goods by adding 15% under Rule 8 of the Central Excise (Valuation) Rules, 2000. The appellant argued that the goods were not consumed in further manufacturing but were supplied for direct use. Citing a Supreme Court case, the appellant claimed that similar goods were valued without additional costs. The Tribunal, after reviewing the case and the Supreme Court decision, agreed with the appellant. It held that the 15% addition was not justified as the goods were not captively consumed for further production. Consequently, the Tribunal set aside the order for valuation and remanded the matter for reevaluation, allowing the appellant a refund if applicable.

Regarding the penalty imposed on the appellant, the Tribunal considered the circumstances, including the confusion during the period of corporatization and the absence of deliberate concealment of facts. Given the uncertainty surrounding duty payment during the transition and the lack of suppression of information, the Tribunal decided to set aside the penalty. The appeal was allowed in favor of the appellant, providing relief from the penalty and requiring a reassessment of the duty amount based on the revised valuation principles.