2014 (1) TMI 110 - AT - Central Excise

Goods produced on job work basis Duty to be paid on value vehicles cleared by the principal manufacturer Waiver of Pre-deposit Held that - Following Audi Automobiles vs. CCE, Indore 2009 (5) TMI 426 - CESTAT, NEW DELHI - the activity of the body building would be treated as job work, even if substantial raw material is used by him and the provisions of Rule 10A of the Central Excise Valuation Rules would be applicable and accordingly the duty would be payable on the price on which the fully finished vehicles are sold by the principle manufacturer - the appellants are directed to deposit the entire amount of duty demand upon such submission rest of the duty to be waived till the disposal Stay granted.

Summary

Issues:
- Interpretation of Rule 10A of the Central Excise Valuation Rules, 2010 regarding duty payment on fully finished vehicles manufactured by job workers acting for their principal manufacturers.

Analysis:
The case involved the appellant receiving chassis from two manufacturers to make vehicle bodies, paying duty on the cost of chassis plus job charges for fully finished vehicles. The department contended that duty should be paid on the price at which the vehicles were cleared by the principal manufacturers, citing Rule 10A of the Central Excise Valuation Rules, 2010. Duty demands were raised for specific periods, upheld by the Commissioner (Appeals), leading to appeals and stay applications by the appellant.

The Tribunal noted the absence of the appellant during the hearing and considered the arguments presented by the learned DR. The DR referenced a previous judgment in the case of Audi Automobiles vs. CCE, Indore, where it was held that the body building activity would be treated as job work, subject to Rule 10A, and duty would be payable based on the selling price of fully finished vehicles by the principal manufacturer.

After reviewing the submissions and case records, the Tribunal found that the issue had been previously decided against the appellant in the Audi Automobiles case. Consequently, the appellant was directed to deposit the entire confirmed duty demand within eight weeks. Upon payment within the stipulated period, the pre-deposit requirement for interest on duty and penalties would be waived, and recovery stayed pending appeal disposal. Compliance was mandated to be reported by a specified date.

In conclusion, the Tribunal upheld the duty payment interpretation under Rule 10A, citing precedent and directing the appellant to comply with the duty demand deposit within a set timeframe to avoid additional financial obligations during the appeal process.