2015 (6) TMI 538 - AT - Central Excise

Penalty u/s 11AC - Interest u/s 11AB - Valuation - addition of amortization cost of pancake master tape - Held that - Direction given by the Tribunal has already been taken care therefore there is no need for any further addition on account of amortisation in the value adopted by the Revenue therefore there was no need of re-working of excise duty which was already worked out and confirmed in the earlier order hence the same confirmation made in the impugned order is absolutely in order and does not require any interference. Since first order of the Tribunal was not challenged by the appellant, at this stage the appellant cannot raise any grievance. In view of the above position we are of the considered view that the impugned order by the Ld. Commissioner is just, proper and legal and no infirmity found therein. Hence the impugned order is upheld - Decided against assessee.

Summary

Issues:
Valuation of excisable goods for the purpose of Central Excise duty - Arm's length transaction between appellant and music companies - Amortization cost of pancake master tape - Appeal against Order-in-Original confirming excise duty demand, penalty, and interest.

Valuation of Excisable Goods:
The appeal was directed against an Order-in-Original confirming the demand of Excise duty, penalty, and interest for the period from 07/5/1997 to 27/5/1998. The appellant, engaged in manufacturing 'Recorded Audit Cassettes,' faced allegations that the transaction/sale with individual music companies was not at arm's length, affecting the assessable value under Section 4 of the Central Excise Act, 1944. The contention was that the wholesale price at which the goods were sold by music companies to their dealers should be considered for valuation, including various charges like program royalty and studio charges. The adjudicating authority confirmed the demand, penalty, and interest, leading to an appeal before the Tribunal.

Arm's Length Transaction:
The issue of arm's length transactions between the appellant and music companies was crucial. The appellant's sale price to music companies was questioned for not being at an acceptable level under the Central Excise Act, impacting the assessable value. The Tribunal had previously remanded the matter to the adjudicating authority for re-working the duty and penalty, emphasizing the amortization of the cost of pancake master tape over the number of copies of existing tapes. However, in the denovo adjudication, the Commissioner confirmed the demand, penalty, and interest, stating that the direction given by the Tribunal had been addressed, and there was no need for further addition based on amortization. The Tribunal upheld the Commissioner's order, emphasizing that the initial Tribunal order had not been challenged by the appellant, leading to the dismissal of the appeal.

Amortization Cost of Pancake Master Tape:
The Tribunal's previous direction regarding the amortization cost of the pancake master tape was a significant aspect of the case. The Commissioner noted that the cost of the pancake master tape had been amortized over the number of cassette tapes made, and the duty had been calculated accordingly. The Commissioner found no need for further interference as the appellant did not challenge this fact during the personal hearing. The Commissioner concluded that the impugned order did not require any re-working of excise duty, as the issues had been settled, except for the amortization aspect, which had been addressed. The confirmation of the duty amount in the impugned order was deemed appropriate and legally sound, leading to the dismissal of the appeal.

In conclusion, the judgment upheld the Commissioner's order, emphasizing the settlement of valuation issues, arm's length transaction concerns, and the amortization cost of the pancake master tape. The Tribunal found no grounds for interference, given the previous direction and the appellant's failure to challenge the initial Tribunal order, ultimately dismissing the appeal.