2006 (7) TMI 211 - SC - Central Excise

Computation of assessable value of mobile cranes under Section 4(4)(d) of the Central Excise Act, 1944 as it stood at the relevant time, prior to the year 2000. Held that - We have gone through the grounds mentioned in the memo of appeal filed by the department before the Tribunal and we have also gone through the grounds mentioned in the civil appeal filed by the department before this Court. As stated above, the only ground taken in both the above appeals by the department was that the judgment of this Court in Maruti Udyog Ltd. (2002 (5) TMI 56 - SUPREME COURT OF INDIA) was pending re-consideration vide Review Petition (C) No. 75/2003. The question as to non-applicability of the judgment of this Court in Maruti Udyog Ltd. (supra) to the present case is not reflected in the appeal memos before the Tribunal and in the civil appeal and, therefore, we refrain from examining the factual conspectus of the case. Appeal dismissed.

Issues involved:
Computation of assessable value of mobile cranes under Section 4(4)(d) of the Central Excise Act, 1944; Creation of a non-functional unit to evade excise duty; Confiscation and appropriation of amount from bank guarantee; Appeal against reduction of assessable value; Application of Circular No. 749/65/2003-CX; Dismissal of Review Petition and withdrawal of circular; Non-applicability of judgment in Maruti Udyog Ltd. case; Dismissal of civil appeal.

Issue 1: Computation of assessable value under Section 4(4)(d) of the Central Excise Act, 1944:
The case involved the computation of assessable value of mobile cranes under Section 4(4)(d) of the Central Excise Act, 1944. The appellate authority reduced the assessable value from Rs. 26,63,440/- to Rs. 22,09,827/- based on the cum-duty price, resulting in a reduced liability for the assessee. The department appealed against this decision, citing the pending reconsideration of a judgment in Maruti Udyog Ltd. case. However, the Tribunal dismissed the department's appeal, leading to a statutory appeal before the Supreme Court under Section 35L(b) of the Act.

Issue 2: Creation of a non-functional unit to evade excise duty:
The facts revealed that the assessee had created a non-functional dummy unit named ACE Industries to evade excise duty on mobile cranes. The unit was used to clear cranes without payment of duty by exploiting exemptions meant for small-scale units. Investigations confirmed that ACE Industries was a division of the assessee, engaged in spare parts trading, with no manufacturing activity. The proprietor confessed to the unit being a ploy to evade duty and misuse exemptions, leading to confiscation and appropriation of funds from the bank guarantee.

Issue 3: Application of Circular No. 749/65/2003-CX and subsequent events:
The department relied on Circular No. 749/65/2003-CX to challenge the assessable value computation. However, the Review Petition against the Maruti Udyog Ltd. judgment was dismissed, leading to the withdrawal of the circular by the Central Board of Excise & Customs. Despite these developments, the department persisted in arguing against the application of the Maruti Udyog Ltd. judgment to the present case, but the Supreme Court declined to delve into this aspect due to the lack of specific pleas raised by the department in the appeals.

Issue 4: Dismissal of civil appeal:
The Supreme Court, after reviewing the grounds presented in the appeals and considering the developments related to the circular and review petition, found no merit in the civil appeal. The Court noted the absence of arguments regarding the non-applicability of the Maruti Udyog Ltd. judgment in the department's submissions. Consequently, the civil appeal was dismissed, leading to the dismissal of related appeals as well, with no order as to costs in any of the appeals.

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