2016 (12) TMI 279 - AT - Central Excise

Valuation - job-work - manufacturing TV cabinets for Weston Electronics - value of the moulded components supplied to them by Weston Electronics to be included in assessable value or not? - the challans were in the name of M/s Celak & Co., while actual manufacturing was being done by M/s Super Cabinet. Admittedly during the period of dispute , M/s Super Cabinet had no SSI Registration - Held that - it is only a procedural lapse that the challans are not in the name of actual manufacturer - It may be mentioned that any amount of duty should always be based on necessary quantitative details with mathematical precision. Hence, we are of the view that the value of component material supplied by M/s Weston Electronics Ltd. has to be included in the assessable value which has been done by the assessee. When it is so, then we find no merit in the impugned order passed by the Collector of Central Excise, Delhi II. The same is hereby set aside - appeal allowed by way of remand.

Summary

Issues involved:
Appeal against order of Collector of Customs & Central Excise, Delhi II regarding inclusion of value of moulded components supplied by Weston Electronics in assessable value for manufacturing TV cabinets on job work basis without SSI Registration.

Analysis:
The present appeal challenges the order of the Collector of Customs & Central Excise, Delhi II dated 24.1.2008, regarding the inclusion of the value of moulded components supplied by Weston Electronics in the assessable value for manufacturing TV cabinets on a job work basis without SSI Registration. The issue had previously come up before the Tribunal in Appeal No.E/101/93-B1, where the matter was remanded back to the adjudicating authority. The adjudicating authority passed the impugned order against which the current appeal is filed, marking the second round of litigation before the Tribunal.

In the case, it was found that the job work challans for receiving moulded components from Weston Electronics were in the name of M/s Celak & Co., while the actual manufacturing was done by M/s Super Cabinet. During the disputed period, M/s Super Cabinet did not have SSI Registration. The appellant argued that the details and value of materials supplied by Weston Electronics were not provided to them, and the department arbitrarily loaded the value. Conversely, the Department contended that the details were supplied by Celak & Co., and based on this information, the demand was confirmed by the Commissioner.

A similar issue arose in the case of Modern Denim Ltd. vs. C.C.E., Ahmedabad, where it was observed that if goods are cleared at NIL duty or fully exempt, there is no basis for demand or penalty. The Tribunal in the case of C.C.E., Triunelveli vs. SSD, Spinning Mills Ltd. held that any duty demand must have a necessary quantitative basis with mathematical precision, and in the absence of such evidence, the demand is unjustified. Following these precedents, the Tribunal concluded that the value of component material supplied by Weston Electronics should be included in the assessable value, leading to the setting aside of the impugned order by the Collector of Central Excise, Delhi II, in favor of the assessee.

Therefore, the appeal was allowed, and the assessee was granted relief based on the principles established in previous judgments emphasizing the necessity of quantitative details with mathematical precision to support any duty demands.