2004 (7) TMI 251 - AT - Central Excise

Summary

Issues involved: Valuation of samples of fabrics for trade promotion.

Analysis:
1. Valuation of trade samples: The case concerns the valuation of samples of fabrics provided by the appellant for trade promotion. The appellant, a manufacturer of cotton and manmade fabrics, supplies these samples to dealers free of cost. The appellant values these samples based on the value of fents and rags, which are goods cleared on payment of duty. However, the department argues that the value should be proportionate to the good fabrics cleared on payment of duty. The trade samples are drawn from first-grade fabrics, with a width of 50 cm and a length generally exceeding 50 cm, sometimes even more than one meter. The Commissioner (Appeals) noted that the samples are of good quality and longer than 50 cm, supporting the department's stance.

2. Proceedings and decision: Despite the absence of the appellant during the proceedings and a request for adjournment, the Tribunal decided to proceed with the case based on the submissions made by the Judicial Departmental Representative (JDR) and a review of the records. The Tribunal rejected the appellant's argument that the value of trade samples should be based on fents and rags, emphasizing that the samples are drawn from good quality fabrics. The Tribunal held that the proportionate value of the good fabrics should be used to determine the value of the trade samples, even if they are not sold. The lower authorities thoroughly discussed the difference between fents, rags, and the appellant's product, supporting the decision to adopt the price of good fabrics for valuation. As a result, the Tribunal upheld the Commissioner (Appeals)'s order, dismissing the appellant's appeal.

In conclusion, the Tribunal affirmed that the value of trade samples for fabrics should be based on the value of good fabrics rather than fents and rags, considering the quality and length of the samples drawn by the appellant. The decision highlights the importance of using a comparable price for trade samples and upholds the lower authorities' approach in determining the valuation of the samples.