2015 (10) TMI 1958 - AT - Central Excise

Valuation of goods - DTA Clearances - Notification No. 8/97-C.E. - 100% EOU - Held that - Quality of materials supplied to these three buyers is different. There is also no allegation that the job work was undertaken within the factory. Goods have to be assessed in the form in which they are cleared from the factory. In this case, there is no allegation by the Revenue and no evidence brought up to show that price is not ex-factory as far as the rejected slabs are concerned. When the place of removal is factory and no additional consideration is collected in connection with the same, there is no justification for addition of job work charges charged by the appellants to the three customers for undertaking works such as edge cutting, sizing, rounding, etc. In view of the above, we do not find any merit in the impugned order and accordingly the same is set aside - Decided in favour of assessee.

Summary

Issues: Dispute over assessable value for rejected granite slabs cleared in Domestic Tariff Area (DTA) under Notification No. 8/97-C.E.

Analysis:
1. The appellant, engaged in manufacturing and exporting polished granite slabs, faced a dispute regarding the assessable value for rejected slabs cleared in the Domestic Tariff Area (DTA) under Notification No. 8/97-C.E. on payment of duty.

2. Following reassessment, the appellant was directed to pay a differential duty of Rs. 5,06,570/- along with interest and penalty.

3. The appellant's counsel argued that certain additional work like edge cutting, rounding, and cutting to different sizes were done for specific customers only, and rejects were sold at a uniform price to all customers. Citing the case of Thermax Ltd. v. CCE - 1998 (99) E.L.T. 481 (S.C.), it was contended that such additional work should not be included in the assessable value.

4. The Revenue contended that the additional work constituted an additional consideration that should be added to the assessable value. They argued that under Central Excise rules, the value should reflect the transaction value, including job work charges for specific customers.

5. The Tribunal analyzed the submissions and referred to the 'Explanation' to Section 4(1) of the Central Excise Act, 1944, which states that additional consideration should flow from the buyer to the assessee in connection with the sale of goods. The Tribunal noted that the rejected slabs were sold at the same price to all customers, with no evidence of quality differences or additional charges for job work.

6. As there was no evidence to show that the job work was undertaken within the factory or that the price was not ex-factory for the rejected slabs, the Tribunal found no justification for adding job work charges to the assessable value. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant with any consequential relief.

7. The Tribunal's decision emphasized the importance of considering the flow of additional consideration from the buyer to the assessee in connection with the sale of goods when determining the assessable value under Central Excise rules.