2002 (10) TMI 122 - AT - Central Excise

Summary

Issues:
1. Challenge against Order-in-Original confirming duty demand.
2. Applicability of Rule 57CC on goods cleared on job work basis.
3. Reversal of duty credit on inputs used in job work basis.
4. Inclusion of freight and insurance charges in the value of final product.
5. Interpretation of ex-work price and completion of sale at factory gate.

Analysis:
1. The appeal challenges the Order-in-Original confirming a duty demand of Rs. 1,15,22,029 on goods manufactured on job work basis and cleared without payment of duty. The appellant, engaged in manufacturing metallised films, contests the duty demand confirmed by the Commissioner of Central Excise, Noida.

2. The appellant manufactures goods on their account and also undertakes job work for conversion of films. The duty demand was based on the rate of 8% under Rule 57CC for goods cleared without payment of duty. The appellant used aluminium wire, on which duty was paid and availed as credit, for metallising purposes in job work basis.

3. The appellant reversed the duty credit on aluminium wire used in job work basis at the time of goods clearance, as per departmental acceptance. The Tribunal found that since the duty availed on inputs used in the exempted final product was already reversed, no further demand under Rule 57CC could be entertained.

4. The issue of including freight and insurance charges in the value of the final product was contested by the appellant. The Tribunal examined invoices and transport documents, noting that charges were separately shown with the buyer as the consignee. The appellant argued that the sale was complete at the factory gate, and the place of removal was not the buyer's premises.

5. The Tribunal considered precedents and held that the appellant's contention on freight and insurance charges was valid. Citing decisions in Associated Strips Limited & Anr. and Frexton Cables (India), the Tribunal set aside the impugned order and allowed the appeal, emphasizing that the sale was completed at the factory gate, supporting the appellant's position on the issue.