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2005 (1) TMI 130 - AT - Central ExciseValuation (Central Excise) - assessable value of the processed fabrics - demand - Interest - HELD THAT - We find no merit in the appeals filed by the appellants where they are claiming that value of shrunk fabrics is to be taken into consideration for arriving at assessable value of the processed fabrics. The appellants also submitted that the Adjudicating authority also demanded interest in respect of the confirmed demand u/s11AB of the Central Excise Act, 1944. The contention of the appellants is that Section 11AB of the C.E.A., 1944 was introduced w.e.f. 11-5-2001. Therefore, the interest u/s 11AB of the C.E.A., 1944 cannot be demanded prior to the date of introduction of the date of Section. We find merit in the arguments. Hence the appellants are liable to pay interest w.e.f. 11-5-2001. Appeals are disposed of as indicated above.
Issues Involved:
Determination of assessable value of processed fabrics based on pre-shrunk fabrics or shrunk fabrics post-processing. Issue 1: Determination of Assessable Value The dispute revolves around whether the assessable value of processed fabrics should consider the value of pre-shrunk fabrics or the shrunk fabrics post-processing. The Revenue argues for the inclusion of pre-shrunk fabrics, while the assessee contends that the value should be based on the shrunk fabrics after processing. Issue 2: Precedents and Legal Interpretation The matter was referred to the Larger Bench due to conflicting decisions in previous cases. The Revenue relies on the Hon'ble Supreme Court's judgment in the case of Ujagar Prints, emphasizing that the assessable value should include the value of grey cloth in the hands of the processor, job work done, manufacturing profit, and expenses. Issue 3: Tribunal Decision The Tribunal, citing the Supreme Court's decision, ruled in favor of the Revenue, stating that the assessable value must consider the value of grey cloth handed over to the processor. The Tribunal emphasized that the intrinsic value of grey cloth, job work, and manufacturing profits and expenses are crucial for determining the assessable value of processed fabrics. Issue 4: Appellants' Argument The appellants relied on a previous case where the Supreme Court's decision was not considered. However, as the matter was settled by the Supreme Court, the Tribunal's decision in favor of the Revenue was upheld, and the previous decision was overruled. Issue 5: Final Decision The Larger Bench decided in favor of the Revenue, upholding the Tribunal's decision. The appeals were then taken up for disposal, with the conclusion that the value of shrunk fabrics should not be considered for determining the assessable value of processed fabrics. Additionally, the appellants were found liable to pay interest under Section 11AB of the Central Excise Act, 1944, from the date of its introduction, i.e., 11-5-2001.
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