2023 (12) TMI 171 - AT - Central Excise

Valuation - Inclusion of value of scrap in the assessable value determined on the basis of sale price of the manufacturer or not - HELD THAT - The plethora of decision being passed after the judgment of P.R. ROLLING MILLS PVT. LTD. 2010 (9) TMI 1072 - SC ORDER in which consistent findings was that value of scrap need not be included in the assessable value. Appellant had rightly placed the following judgments namely SRF LTD. VERSUS COMMISSIONER OF C. EX., CHENNAI-I 2007 (3) TMI 613 - CESTAT, CHENNAI Affirmed by Supreme Court in SRF LTD. VERSUS COMMISSIONER 2016 (4) TMI 1068 - SC ORDER , GHATGE PATIL INDS. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE 2005 (7) TMI 648 - CESTAT MUMBAI , M/S AUTOMOTIVE STAMPINGS AND ASSEMBLIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE-I 2019 (5) TMI 1169 - CESTAT MUMBAI , AD-MANUM PACKAGING LTD. VERSUS CCE, INDORE 2016 (9) TMI 630 - CESTAT NEW DELHI , CCE AHMEDABAD-II VERSUS M/S RECLAMATION WELDING LTD. 2014 (8) TMI 186 - CESTAT AHMEDABAD , to support his stand apart from the fact that in the Appellant s own case, for two other periods pre and post 2007, demand against the Appellant has been set aside for the reason that value of scrap need not be included in the assessable value. The impugned order set aside - appeal allowed.

Summary

Issues involved:
Inclusion of scrap value in assessable value for rolled products manufactured on job work basis.

Facts of the case:
The Appellant, a manufacturer of rolled products of Iron & Steel, undertook job work for Steel Authority of India Limited (SAIL). The assessable value was determined based on the sale price adopted by SAIL. During manufacturing, scrap was generated and cleared on payment of duty. The Department claimed that the scrap value should have been included in the value of rolled products, leading to a demand with penalty and interest. The dispute arose as the Appellant contended that the duty was discharged based on SAIL's sale price, citing legal precedents and rules.

Appellant's arguments:
The Appellant's counsel referred to previous Tribunal decisions and Supreme Court rulings to support their case. They argued that the demand was not sustainable under Rule 4(5)(a) of the CENVAT Credit Rules, 2004, and that the Commissioner (Appeals) order was legally flawed.

Respondent's arguments:
The Respondent's representative supported the Commissioner (Appeals) order, citing past decisions to justify their stance and opposing the Appellant's contentions.

Tribunal's analysis:
After reviewing the submissions and legal precedents, the Tribunal noted a series of decisions supporting the Appellant's position. They highlighted various cases where the value of scrap was held not includable in the assessable value. Relying on consistency in judgments and judicial precedent, the Tribunal allowed the appeal and set aside the Commissioner's order.

Final Order:
The appeals were allowed, and the Commissioner's order was set aside with any consequential relief. The decision was pronounced in open court on the specified date.