2016 (10) TMI 1130 - AT - Central Excise

Valuation - job-work - related concern - depression to the assessable value - Held that - The order appears to have been passed by learned Commissioner (Appeals) only on presumption without any objective analysis of the valuation of job worked goods made by the assessee for KRVP - In absence of any cogent evidence to establish object of the parties to depress the assessable value, it is not possible to agree with the finding of the learned Commissioner (Appeals), who only passed his order on suspicion particularly on the premise of commonality of the directors - decided in favor of appellant. Even though Revenue says that both the authorities below committed error in law, nothing is demonstrated before us to show the manner how job worked goods were valued by assessee to the detriment of justice. There is also no material on record to show that investigation made any sample test of value of transactions to establish that there was depression to the value of the job worked goods. Appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
1. Levy of duty based on the relationship between the appellant and another company.
2. Dropping of a part of demand by the Commissioner (Appeals) and the weightage given to the investigation.
3. Valuation of job worked goods and commonality of directors between the parties involved.

Analysis:

Issue 1: Levy of duty based on relationship
The appellant was aggrieved by the levy of duty due to the relationship with another company, M/s. KRVP Overseas Pvt. Ltd. The Revenue argued that the directors' commonality justified the duty imposition. However, the Tribunal found that the order lacked evidence of any sample test to prove the depression of assessable value. The Commissioner's decision was based on presumption without objective analysis of the valuation of job worked goods. The Tribunal concluded that without concrete evidence, the duty levy based on the relationship was not justified, and the appellant succeeded on this aspect.

Issue 2: Dropping of part of demand
In the Revenue's appeal, they contested the dropping of a part of the demand by the Commissioner (Appeals). Revenue claimed that the investigation was not given due weightage by the authorities, leading to an incorrect decision. However, the Tribunal noted the lack of evidence showing how the job worked goods were undervalued to the detriment of justice. There was no comparative analysis or sample test to establish the alleged depression in value. As a result, the Tribunal dismissed Revenue's appeal due to the absence of material supporting their claim.

Issue 3: Valuation of job worked goods
The valuation of job worked goods and the commonality of directors between the parties were crucial in both appeals. The Tribunal emphasized the importance of objective analysis and concrete evidence in determining the assessable value. Without proper evidence or comparative analysis, the decisions made by the authorities were deemed insufficient. The Tribunal highlighted the necessity of conducting sample tests or comparative anatomy to establish any undervaluation. Since such evidence was lacking, the Tribunal allowed the assessee's appeal and dismissed Revenue's appeal.

In conclusion, the Tribunal ruled in favor of the appellant, allowing their appeal, while dismissing Revenue's appeal due to the lack of substantial evidence supporting the claims made by both parties.