2006 (4) TMI 7 - AT - Central Excise

Central Excise Job work Valuation Principals supplied raw materials value not included in intermediate goods value

Summary

Issues:
1. Inclusion of value of raw materials received in assessable value of final products.
2. Applicability of Rule 57F (3) and Rule 57F (4) challans.
3. Double availment of credit by customers.
4. Job worker's liability in discharging duty on final products.

Analysis:
1. The appeal dealt with the inclusion of the value of raw materials received in the assessable value of final products. The appellants argued that as job workers, they were not required to add the value of raw materials received under Rule 57F (4) challans. They contended that the procedure adopted by them was known to the department, and the allegation of under-valuation was unsustainable. They relied on judicial precedents, including a ruling by the Apex Court, to support their contention.

2. The Tribunal examined the applicability of Rule 57F (3) and Rule 57F (4) challans in the context of manufacturing intermediate products. Referring to the judgment in the case of International Auto Ltd., it was established that the value of raw materials received for job work need not be added to the assessable value of intermediate goods manufactured by job workers. The Tribunal also cited other cases supporting this view, emphasizing that if the supplier of raw materials had taken modvat credit, the job worker was not required to include this value in the intermediate goods.

3. The issue of potential double availment of credit by customers was raised by the appellants. They argued that including the value of raw materials again would result in such double availment. The Tribunal considered this argument in light of the legal provisions and previous judgments, ultimately concluding that the appellants' position was valid and that the demands made by the Revenue were time-barred.

4. Lastly, the Tribunal addressed the job worker's liability in discharging duty on final products. Relying on the judgments cited by the appellants, including the case of Harsha Industries, the Tribunal found in favor of the appellants. It was held that the impugned order was set aside, and the appeal was allowed based on the established legal principles and precedents.

This comprehensive analysis of the judgment highlights the key issues raised, the arguments presented by the parties, and the Tribunal's decision based on legal interpretations and precedents.