2004 (6) TMI 99 - AT - Central Excise

Summary

Issues:
1. Whether block and stereo charges collected by the assessee for printing on plastic bags should be added to the assessable value.
2. Imposition of penalty under Section 11AC and Rule 173Q.
3. Applicability of interest under Section 11AB.

Analysis:
1. The appeal arose from an Order-in-Appeal confirming the demand of duty amount and penalties imposed by the Additional Commissioner. The Commissioner found suppression of facts as the assessee did not disclose the collection of block and stereo making charges separately through debit notes, which should have been included for larger orders. The issue was whether these charges should be added to the assessable value. The Tribunal held that these charges collected via debit notes must be included in the assessable value of plastic bags, sheets, and films cleared by the assessee.

2. The learned Counsel argued against adding the charges to the assessable value and contested the imposition of penalty under Section 11AC. The Tribunal referred to previous judgments, including a Larger Bench judgment, which held that the cost of patterns supplied to buyers is includible in the assessable value. The Tribunal reduced the penalty imposed under Section 11AC from Rs. 24,052/- to Rs. 10,000/- based on a Supreme Court judgment.

3. The imposition of interest under Section 11AB was also challenged. The Tribunal upheld the imposition of interest, stating that the provision was introduced before the proceedings commenced, justifying the levy. The penalty of Rs. 1,000/- imposed under Rule 173Q was also upheld. The impugned order was modified only to reduce the penalty under Section 11AC, while the rest of the appeal was rejected for lack of merit.