1989 (9) TMI 281 - AT - Central Excise

Summary

Issues:
Stay petitions filed by M/s. Tania Concrete Products Ltd. seeking stay of recovery of duty amounts due, inclusion of cost of cast iron inserts in assessable value of Concrete Sleepers, interpretation of the term "manufacture" under Central Excises and Salt Act, 1944, reliance on past judgments in similar cases, consideration of hardship factor in granting stay.

Analysis:
The judgment pertains to three Stay Petitions filed by M/s. Tania Concrete Products Ltd. to stay the recovery of duty amounts due following Orders in Appeal by the Collector of Central Excise. The issue revolves around the inclusion of the cost of cast iron inserts in the assessable value of Concrete Sleepers supplied to the Railways. The Assistant Collector had decided that the value of the inserts should be included in the assessable value, a decision upheld by the Collector (Appeals). The appellants argued that the inserts are not essential parts of the Sleepers and cited various judgments supporting their position, including a decision by the Customs Excise and Gold (Control) Appellate Tribunal and the Andhra Pradesh High Court. They contended that the inserts are not essential for manufacturing the Sleepers and can be excluded from the assessable value.

The Respondent, however, argued that the inserts are embedded in the Sleepers during the manufacturing process and are essential components forming part of the product. Referring to the definition of "manufacture" under the Central Excises and Salt Act, 1944, the Respondent contended that the inserts are integral to the manufacturing process and not optional accessories. The main issue was whether the inserts are essential for the use of the Sleepers and whether they form part of the assessable value for duty calculation.

The Tribunal considered the arguments from both sides and analyzed past judgments cited by the appellants. It noted that while some judgments supported the appellants' position, others had been reversed or were subject to appeal. The Tribunal emphasized that the inserts were firmly embedded in the Sleepers, essential for their use, and formed an integral part of the product. The Tribunal concluded that the appellants had not established a prima facie case warranting a stay of the Collector (Appeals) order. It was also noted that the hardship factor, which had been considered in other cases, did not support the plea for a stay in this instance. The Tribunal directed the transfer of the appeals to the Special Bench for further consideration due to the valuation aspect involved in the case.

In summary, the judgment addressed the issue of including the cost of cast iron inserts in the assessable value of Concrete Sleepers, interpreting the term "manufacture," analyzing past judgments, and considering the hardship factor in granting a stay. The Tribunal rejected the appellants' application for a stay, emphasizing the essential nature of the inserts in the manufacturing process and the lack of a prima facie case in their favor.