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Issues involved: Determination of total value of sales for a small-scale unit manufacturing nuts and bolts; inclusion of sales of exempted items in the total value; imposition of penalty for wrongly declared value; classification and taxation of bright bars and bright bar scrap.
Issue 1 - Valuation of Sales: The appellant, a small-scale unit manufacturing nuts and bolts, received a show cause notice from the Assistant Collector regarding the inclusion of the valuation of goods in determining the total value of sales. The appellant argued that the sale of bright bars and bright bar scrap should not be subjected to fresh duty as they were essentially the same as bars purchased from the market. However, both the Assistant Collector and the Tribunal rejected the appellant's objections. Issue 2 - Aggregation of Sales of Exempted Items: The appellant contended that the sales of exempted items, such as rivets, C.I. castings, washers, scrap, etc., should not be aggregated with the sales of nuts and bolts to determine if the total sales value exceeded the specified limit. The Tribunal ruled that the exemption granted to a particular item does not make it non-excisable, and therefore, the sales of exempted items could be aggregated for valuation purposes. Issue 3 - Taxation of Bright Bars and Bright Bar Scrap: The Tribunal found that the transformation of duty-paid round bars into bright bars by passing them through a narrow die resulted in a distinct and different commodity, thus subjecting them to duty. However, the Court disagreed with this finding, stating that there was no evidence to support the claim that bright bars were a different commodity. Consequently, the Court held that the value of sales of bright bars and bright bar scrap should not be aggregated with the sales of nuts and bolts. In conclusion, the appeal was allowed, and it was held that the value of sales of bright bars and bright bar scrap should not be included in the total sales value of nuts and bolts.
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