2008 (4) TMI 24 - SC - Central Excise

Demand and penalty - manufacturer of wiring harnesses - manufacture against specific contracts - received certain component parts of wiring harness, free of charge, from their buyers which were incorporated in wiring harness revenue contends to include the value of free supply component parts in value of wiring harnesses - in view of facts & circumstances of the case & especially in view of decision of SC in earlier case revenue appeal is dismissed with going into the question of limitation

Summary

Issues Involved:
- Duty evasion on free supplies received by the respondent
- Imposition of duty and penalties by the Commissioner
- Tribunal's decision on the point of limitation
- Application of precedent judgment on merits

Analysis:
The case involves the respondent, a manufacturer of wiring harnesses, who received certain component parts free of charge from their buyers, which were incorporated into the wiring harness without adding the value of these free supplies to the assessable value for excise duty purposes. The appellant discovered this practice during a search of the respondent's premises and alleged that the respondent had suppressed information to evade duty payment. A show cause notice was issued demanding duty payment of Rs. 96,01,561 for the period from March 1995 to January 1997, invoking the extended period of limitation under Section 11A of the Central Excise & Salt Act, 1944. The Commissioner confirmed the duty demand and imposed penalties on the respondent's Managing Director and DGM(Marketing).

The respondents appealed to the Tribunal, where the case was not decided on merits but on the point of limitation, ruling in favor of the assessee. The counsel for both parties acknowledged that a precedent judgment by the Supreme Court in the case of International Auto Ltd. v. Commissioner of Central Excise, Bihar, concluded the issue on merits in favor of the assessee. Considering the established precedent and the facts of the case, the Supreme Court dismissed the appeals filed by the revenue without delving into the question of limitation. The judgment was based on the application of the precedent judgment, which had already settled the issue on merits against the revenue and in favor of the assessee.

In conclusion, the Supreme Court's decision in this case was influenced by the precedent judgment's conclusive ruling on the merits of the issue in favor of the assessee. The dismissal of the appeals without considering the question of limitation indicates the court's reliance on established legal principles and precedents to resolve the matter. The judgment underscores the significance of legal precedents in guiding decisions and ensuring consistency in the application of law.