2000 (6) TMI 113 - AT - Central Excise

Summary

Issues: Valuation of excisable items manufactured by the appellant from 1992-93 to 1995-96.

Analysis:
1. The appellant, engaged in manufacturing contact lenses, sun glasses, etc., disputed the valuation of plated fronts, plated temples, and glass lenses, which were excisable items exempt from duty during 1992-93 to 1995-96. The manufacturer's value was provisionally accepted, but the department appointed Cost Accountants under Section 14A of the Central Excise Act to determine the cost of production. The Cost Accountant's report aimed to find assessable value, which was beyond the scope of their role.

2. The Additional Commissioner remitted the report back to the Cost Accountant for recalculation without clear reasons. The Cost Accountant, in the second report, again determined assessable value, including royalty, leading to an increase in the manufacturer's value. The Asstt. Commissioner added 5% towards royalty, despite royalty being applicable only to complete sun glasses, not parts. The special audit report was deemed unhelpful in determining the assessable value of intermediate products.

3. The appellate authority dismissed the appeal without addressing the valuation dispute raised by the appellant. Consequently, the orders of the adjudicating authority and the appellate Commissioner were set aside, and the duty demand was quashed. The matter was remitted back to the adjudicating authority to determine the cost of intermediate products with the assistance of a competent Cost Accountant suggested by the appellant.

4. The misuse of power under Section 14A was highlighted, emphasizing the need for proper discretion in selecting competent Cost Accountants and their independent functioning. The excise authorities were urged to ensure Cost Accountants act independently to fulfill their professional obligations. The appellant was directed to provide a fresh bank guarantee for the original amount, and the adjudicating authority was instructed to expedite the final order within two months, excluding the Cost Accountant's time.

5. The judgment concluded by expressing dissatisfaction with the misuse of power by the departmental authorities and emphasized the importance of fair and independent professional conduct in resolving disputes related to excise valuation.