2003 (10) TMI 215 - AT - Central Excise

Summary

Issues:
1. Application for waiver of pre-deposit of duty and penalty.
2. Assessable value calculation including notional profit.
3. Interpretation of provisions of Central Excise Act and Valuation Rules.
4. Tribunal decisions on assessable value determination for goods manufactured on job work basis.

Analysis:
1. The judgment dealt with an application for waiver of pre-deposit of duty and penalty amounting to Rs. 1,03,826/- and Rs. 10,000/- respectively, confirmed on Copper Wire Bar under Chapter 74 of CETA, 1985. The Tribunal decided to hear and dispose of the appeal after waiving the pre-deposit with the consent of both parties.

2. The dispute arose from the appellants adding 10% notional profit to the cost of production to determine the assessable value of goods. The department contended that as per Section 4(b) of the Central Excise Act, 1944, and Rule 11 of the Central Excise (Valuation) Rules, 2000, a 15% notional profit should have been included. This led to the confirmation of duty and imposition of penalty.

3. Upon hearing both sides, the Tribunal referred to previous decisions in similar cases. It cited the Tara Industries Ltd. v. CCE, Chandigarh and Mahindra Ugine Steel Co. Ltd. v. CCE, Pune-I cases, where it was held that the assessable value of goods manufactured on job work basis should be based on the cost of raw material plus job work charges, even after 1-7-2000. The Tribunal concluded that the inclusion of 10% notional profit was not necessary based on these precedents.

4. In line with the decisions in the Tara Industries and Mahindra Ugine Steel cases, the Tribunal set aside the impugned order and allowed the appeal with consequential relief. This ruling was based on the interpretation of the provisions of the Central Excise Act and Valuation Rules regarding the assessable value determination for goods produced on a job work basis.