2022 (7) TMI 1239 - AT - Central Excise

Valuation - Job work - addition of the value of waste and scrap cleared by the appellant in the assessable value - non-accounting of the waste and scrap that was arising during the process of conversion and retained by them - HELD THAT - Undisputedly in the present case, the goods and wire rods have been cleared for payment of duty on the value fixed by the TISCO for whom appellants have performed the job work. Since the value adopted was the clearance of the goods as fixed by TISCO for the customer of Tisco it would have taken into account all the wastes including the value of waste and scrap retained by the appellants. All the components going into the value would have thus formed part of the assessable value for such clearances. It is not the case that job work charges have been suppressed to the extent of the value of waste and scrap in the present case as goods have been cleared on actual value fixed by TISCO. There is no merit in the appeal - Appeal of Revenue dismissed.

Issues:
1. Dropping of proceedings initiated by Show Cause Notice by the Commissioner.
2. Allegations of not accounting for waste and scrap during conversion process.
3. Additional consideration in assessable value as per Central Excise Act.
4. Tribunal's consideration of value fixed by TISCO.
5. Comparison with previous Tribunal and High Court decisions.
6. Decision on the appeal filed by the Revenue.

Analysis:
1. The appeals were filed by the Revenue against the dropping of proceedings initiated by the Commissioner based on Show Cause Notices. The Commissioner had dropped the proceedings initiated against the appellant concerning the conversion of billets into wire rods and the alleged failure to account for waste and scrap during the conversion process.

2. The Revenue alleged that the appellant did not account for waste and scrap during the conversion process, leading to the demand for additional duty. The Revenue contended that the value of waste and scrap cleared by the appellant was not included in the assessable value of the finished product, resulting in the demand made by the Revenue.

3. The Revenue argued that the appellant, as a job worker, was allowed to retain wastages without payment to the principal, constituting additional consideration under the Central Excise Act. The Revenue claimed that such additional consideration should have been included in the assessable value of the finished product.

4. The Tribunal considered that the goods and wire rods were cleared based on the value fixed by TISCO, taking into account all wastes, including those retained by the appellant. The Tribunal noted that all components contributing to the value were part of the assessable value for the clearances, as the goods were cleared at the actual value determined by TISCO.

5. The Tribunal referenced a previous decision involving Surindra Steel Rolling Mills, where a similar view was upheld by the Tribunal and subsequently confirmed by the Punjab and Haryana High Court. The Tribunal found no reason to deviate from this precedent and upheld the impugned order, dismissing the appeal filed by the Revenue.

6. After considering the impugned orders, submissions made in the appeal, and arguments presented, the Tribunal upheld the decision of the Commissioner to drop the proceedings. The Tribunal found no merit in the appeal filed by the Revenue, leading to the dismissal of the appeal.

This detailed analysis highlights the key issues addressed in the judgment, including the dropping of proceedings, the assessment of additional consideration in the assessable value, and the Tribunal's consideration of relevant legal precedents.

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