2018 (1) TMI 1162 - AT - Central Excise

Valuation - job-work - place of removal - Revenue felt that since the appellant were transferring the goods to the sale depots of the principal manufacturer, the assessable value should be done in terms of Section 4(1) (b) instead of Section 4(1) (a) - Held that - similar issue decided in the case of AUDI AUTOMOBILES Versus COMMISSIONER OF CENTRAL EXCISE, INDORE 2009 (5) TMI 426 - CESTAT, NEW DELHI , where it was held that it is apparent that the said firms had cleared the goods in relation to the body fabricating and mounting on the chassis which were supplied to the said firms free of cost by the manufacturer of chassis. Being so, the activity for the purpose of valuation would squarely fall under Rule 10A and not under Rule 6 - the valuation of the goods is required to be done under Rule 10A of the Valuation Rules 2000. Adjustment of excess duty paid or less duty paid as compared to depot price - Held that - since the goods have not been assessed provisionally at the time of clearance from the factory of the assessee, adjustment of duty paid in excess, if any, cannot be adjusted against the duty demand recoverable from the assessee - duty demand not sustainable. Valuation - allowability - certain discounts and cum duty price vs. net assessable value - Held that - the matter is remanded back to the adjudicating authority for verification of documentary evidence produced by the appellant and to establish the correct assessable value and to re-quantify the demand and interest, if the contention of the appellant is found correct. Appeal disposed off by way of remand.

Summary

Issues: Valuation of goods under Central Excise Act, adjustment of excess/less duty paid, consideration of discounts in duty calculation.

Valuation of Goods:
The case involved the appellant engaged in fabrication of tipper/trailer bodies for principal manufacturers. The Revenue contended that the assessable value should be determined under Section 4(1)(b) instead of Section 4(1)(a) due to goods being transferred to the principal manufacturer's sales depot. The Tribunal referenced the case law Audi Automobiles vs. CCE-2010, establishing that valuation must be done in accordance with Rule 10A of Central Excise Valuation Rules. The Tribunal upheld the demands of duty and interest, citing that the goods' valuation falls under Rule 10A.

Adjustment of Excess/Less Duty Paid:
The appellant claimed adjustments for excess or less duty paid compared to the depot price of the principal manufacturer. The Tribunal noted that the Commissioner correctly ruled against such adjustments, stating that duty adjustments are only permissible for provisionally assessed goods. Since the goods were not provisionally assessed at clearance, no adjustment of duty paid in excess was allowed. The Tribunal dismissed the appellant's contention that no duty was demandable.

Consideration of Discounts in Duty Calculation:
The appellant argued that the Revenue did not consider discounts while adopting the full sale price of the principal manufacturer, leading to duty payment discrepancies. The matter was remanded to the adjudicating authority to verify documentary evidence provided by the appellant, establish the correct assessable value, and re-quantify the demand and interest if the appellant's contentions were found valid. The appeal was disposed of through remand for further verification and assessment.

This judgment clarifies the valuation methodology under the Central Excise Act, highlights the limitations on duty adjustments, and emphasizes the importance of accurate assessable value determination in duty calculations.