2005 (8) TMI 130 - HC - Central Excise

Summary

Issues:
1. Application under Sec. 35H(1) of the Central Excise Act, 1944 for reference to answer questions arising from Tribunal's order.
2. Inclusion of cost of rubber/plastic rings in assessable value of pipes and tubes.
3. Inclusion of inspection charges in assessable value of pipes and tubes.
4. Appeal by Revenue against Tribunal's findings in favor of assessee.
5. Interpretation of Supreme Court decision in Govt. of India v. Madras Rubber Factory Ltd. [1995 (77) E.L.T. 433].

Analysis:
1. The Commissioner of Central Excise and Customs filed an application under Sec. 35H(1) of the Central Excise Act, 1944, seeking a reference to answer questions from the Tribunal's order on Appeal No. E/1183/97-A and Appeal No. E/Misc./512/99-A. The Tribunal partly allowed the appeal filed by the assessee and rejected part of it.

2. The first issue was whether the fitting of rubber/plastic rings could be included in the assessable value of pipes and tubes. The Tribunal ruled in favor of the assessee, stating that the cost of such rings, used for protection during transportation, was not includible in the assessable value.

3. Another question was whether inspection charges could be included in the assessable value of pipes and tubes. The Tribunal decided in favor of the assessee, citing a previous decision regarding additional testing/inspection charges not being includible when borne by customers.

4. The Revenue challenged the Tribunal's findings on the cost of rubber/plastic rings and inspection charges by filing an application under Sec. 35G of the Act. However, the High Court found no substantial question of law requiring its intervention, as the Tribunal's findings were based on factual considerations and did not warrant a reference.

5. The High Court rejected the application, emphasizing that the facts of the present case did not align with the circumstances of the Supreme Court decision in Govt. of India v. Madras Rubber Factory Ltd. The Court highlighted the necessity of factual findings favoring Revenue before tax implications could be considered, concluding that no grounds existed to interfere with the Tribunal's order or call for a reference on the questions proposed.

In summary, the High Court dismissed the application, upholding the Tribunal's findings on the cost of rubber/plastic rings and inspection charges, and concluding that no substantial legal questions necessitated a reference.