2015 (4) TMI 244 - HC - Central Excise

Valuation - Power of Tribunal - whether the Tribunal could pass an order based on the statement made by the learned counsel for the respondent/assessee that the actual amortised cost has been included in the value of the components during the relevant period, which is not supported by any material - Held that - Tribunal has merely recorded the statement made by the learned counsel for the assessee and dismissed the appeal filed by the Department. In this view of the matter, the findings of the Tribunal appears to be based on conjectures and surmises. Even though the Tribunal has accepted the findings of the Commissioner (Appeals), proceeded on a wrong premise and recorded a new and undecided fact at the instance of the counsel for the assessee to dismiss the appeal filed by the Department. - order passed by the Tribunal is not in consonance with the proceedings in issue or material available on record. Accordingly, this appeal deserves to be remanded back to the Tribunal for fresh consideration - Matter remanded back - Decided in favour of Revenue.

Summary

Issues:
1. Acceptance of incorrect statement by the counsel
2. Valuation of goods for excise duty purposes

Issue 1: Acceptance of incorrect statement by the counsel
The case involved a dispute regarding the acceptance of an incorrect statement by the counsel representing the respondent/assessee. The Tribunal had based its decision on the statement made by the counsel that the actual amortised cost had been included in the value of the components during the relevant period. The High Court found that the Tribunal's decision was not supported by any material evidence and was based on conjectures and surmises. The High Court held that the Tribunal's order was not in line with the available material on record and ordered a remand back to the Tribunal for fresh consideration of the issue.

Issue 2: Valuation of goods for excise duty purposes
The dispute arose from the valuation of excisable goods for the purpose of demanding duty. The initial show cause notice alleged that the assessee had not declared the correct assessable value of goods manufactured and supplied. The Adjudicating Authority held that the entire cost of moulds had to be taken into account for demanding duty as the assessee could not establish the pro-rata amortization cost per piece in a legally sustainable manner. However, the Commissioner (Appeals) set aside the order, emphasizing that duty could not be demanded on the moulds without considering the amortization of their cost. The Tribunal upheld the Commissioner (Appeals) decision, noting that the amortised cost of the mould had been correctly included in the value of the components for the relevant period. The High Court, while remanding the case back to the Tribunal on another issue, did not disturb the findings related to the valuation of goods for excise duty purposes.

In conclusion, the High Court's judgment addressed the issues of accepting incorrect statements by counsel and the valuation of goods for excise duty purposes. The Tribunal's decision was remanded back for fresh consideration regarding the acceptance of counsel's statement, while the findings related to the valuation of goods remained undisturbed.