2015 (10) TMI 2324 - AT - Central Excise

Valuation - Inclusion of expenditure in developing the art work and plate making charges - Held that - The main contention of the appellant is that the art work and plate making charges wherever they have raised in the form of debit note are pertaining to the cases wherein no manufacturing has taken place and it is for this reason that they have raised the debit note on the customer to recover the expenses incurred by them. We find force in the contention of the appellant inasmuch as the appellant is taking this stand from the time of audit. We also note that revenue has not investigated the explanation of the appellant by contacting the customers or at least ask the appellant to get the explanation from the customer. The art work and plate making as such are not excisable activities and these will form part of the assessable value only if the same are used in the manufacture of laminated tubes. Keeping in view the overall factual matrix, we are of the view that no case is made to indicate that such art work/plates were used in the manufacture of laminated tubes and value of such artwork/plates was not included in the value of laminated tubes. - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Assessable value determination based on art work and plate making charges.

Analysis:
The case involved the appellant, engaged in manufacturing laminated tubes for products like toothpaste, incurring expenses for art work and plate making. The appellant raised debit notes to customers for these expenses, which were not included in the assessable value, leading to demands being issued. The appellant argued that they included the value of art work and plate when used in manufacturing, but in cases where not used, they recovered costs via debit notes. They contended that since these items were not used in manufacturing excisable goods, duty payment was not required. The appellant stated the impossibility of producing evidence for non-use and highlighted the negligible demand compared to yearly duty paid, questioning the invocation of the extended period for the show-cause notice. The respondent argued the lack of evidence supporting the appellant's claim of non-use. The Tribunal noted the appellant's consistent stance from audit to the notice stage, emphasizing the lack of investigation by revenue into the appellant's explanation or contacting customers for clarification. The Tribunal recognized that art work and plate making were not excisable activities unless used in manufacturing laminated tubes. Considering the factual context, the Tribunal found no evidence indicating use of art work/plates in manufacturing, leading to the exclusion of their value from the assessable value of laminated tubes. Consequently, the Tribunal set aside the order, allowing the appellant's appeal.