2008 (4) TMI 264 - AT - Central Excise

Credit on the packing material, antistatic oil, lubricating oil etc. - cost of packing material and inputs - held that there is no basis to conclude that the tariff value fixed and declared by the Government of India under Section 3(2) of Central Excise & Salt Act, 1944 does not take into account the cost of antistatic oil and other packing material. When duty is paid on the basis of tariff value there is no scope for assessable value under Section 4 revenue s appeal is rejected

Summary

Issues:
1. Appeal against Commissioner (Appeals) order regarding tariff value and assessable value under Central Excise & Salt Act, 1944.
2. Denial of Cenvat Credit on packing material, antistatic oil, and lubricating oil.
3. Government of India's declaration of tariff value without detailed break-up.

Analysis:
1. The appeal was filed by the Revenue against the Commissioner (Appeals) order concerning the tariff value fixed by the Government of India under Section 3(2) of the Central Excise & Salt Act, 1944. The Commissioner (Appeals) concluded that the tariff value takes into account the cost of antistatic oil and other packing material, eliminating the scope for assessable value under Section 4 of the Act. It was highlighted that the Cenvat Credit cannot be denied on items like packing material and antistatic oil, as discussed elaborately by the Commissioner (Appeals).

2. Despite no representation from the respondents, the learned SDR for the Revenue reiterated the arguments made by the original adjudicating authority to deny credit on packing material, antistatic oil, and lubricating oil. The adjudicating authority's stance was that the assessee failed to prove the inclusion of input costs in the tariff value of the final product. The challenge lies in the absence of a detailed breakdown of the tariff value by the Government of India, making it difficult for any assessee to demonstrate the consideration of packing material and other disputed inputs in the tariff value.

3. The Tribunal observed that the Commissioner (Appeals) extensively deliberated on the issue at hand. It was noted that the original adjudicating authority insisted on the assessee proving the inclusion of packing material and other inputs in the tariff value, which was deemed unfeasible without a breakdown provided by the Government of India. The absence of a specific indication from the government to exclude the cost of packing material and inputs from the tariff value further supported the decision to reject the Revenue's appeal.

In conclusion, the Tribunal rejected the Revenue's appeal based on the comprehensive analysis of the tariff value, assessable value, and the lack of detailed break-up in the Government of India's declaration, emphasizing the impracticality of expecting assessee to establish the inclusion of costs in the tariff value without explicit guidance.