2023 (12) TMI 1059 - AT - Central Excise

Valuation - addition of scrap value to the assessable value, at which Appellant job worker had cleared the intermediate product to the input supplier cum Principal manufacturer - demand alongwith interest and penalty - HELD THAT - Order already passed in the Appellant s own case for its earlier period VISHNU KUMAR RATANLALJI OZA VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR AND M/S. VINAR ISPAT LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR 2023 (2) TMI 1232 - CESTAT MUMBAI holding that money value of the scrap retained by the Appellant does not represent additional consideration for the Appellant and it is not liable to be included in the assessable value of the job worked goods, being cleared on payment of duty to the manufacturer. There is no substantial change of law in the meantime except inclusion of Rule 10(A) which CBEC have clarified vide its Circular dated 31.03.2010 that once goods manufactured by job workers are not sold by the Principal Manufacturer but are consumed by the Principal manufacturer, Provision of Rule 8 of Valuation Rules, 2000 that provides for determination of value on the basis of 110% of the cost of production is required to be adopted, besides the facts that ever since the judgment of P.R. Rolling Mills passed way back in 2010 2009 (3) TMI 444 - CESTAT, BANGALORE , it has been consistently held by the Judicial Authorities that additional scrap value would not determine the final assessable value. The order passed by the Commissioner (Appeals) is set aside - appeal allowed.

Summary

Issues involved:
Conformation of demand by Commissioner (Appeals) by adding scrap value to assessable value, interest, and penalty.

Facts and Decision:
The Appellant, a manufacturer of iron and steel products, cleared rolled products to input suppliers on job work basis. Dispute arose regarding assessable value determination, with the Department demanding inclusion of scrap value. Multiple Show-cause notices led to confirmed demands, interest, and penalties. Appeals were made to challenge the Order-in-Appeal. Appellant argued for exclusion of scrap value based on judicial precedents and Rule 10A(iii) of Valuation Rules, 2000. The Tribunal referred to past decisions and Circulars, emphasizing that scrap value need not be included in assessable value. Following consistent judicial rulings, the Tribunal allowed the appeals and set aside the Commissioner's order.

Judge's Separate Judgment:
No separate judgment was delivered by the judges.

This judgment by the Appellate Tribunal CESTAT MUMBAI addressed the issue of including scrap value in the assessable value of goods cleared on a job work basis. The Tribunal considered past decisions and Circulars, concluding that the scrap value should not be added to the assessable value. The appeals were allowed, setting aside the Commissioner's order.