1996 (2) TMI 264 - AT - Central Excise

Summary

Issues:
1. Applicability of Section 4(4)(d)(ii) of the Central Excises & Salt Act.
2. Re-determination of assessable value by including rebate not passed on to buyers.
3. Binding nature of departmental clarifications and circulars on Courts or quasi-judicial authorities.

Analysis:

Issue 1: Applicability of Section 4(4)(d)(ii) of the Central Excises & Salt Act
The appeals involved a common issue regarding the applicability of Section 4(4)(d)(ii) of the Central Excises & Salt Act. The appellants, engaged in soap manufacturing, used minor oils in their products. The main contention was whether the assessable value of the products should be revised to include rebates granted on excise duty, despite not passing on the benefit to consumers. The lower authorities had ruled against the appellants on this issue.

Issue 2: Re-determination of assessable value by including rebate not passed on to buyers
The appellants argued that certain rebates were allowed under specific notifications, and the Excise Authority could not re-determine the assessable value by including these rebates. They cited relevant circulars and previous Tribunal decisions in their favor. The Department contended that the value should be re-determined to prevent revenue loss, referencing the Explanation to Section 4(4)(d)(ii) of the Act and judicial precedents. The Tribunal noted that the issue had been previously considered and decided in favor of the assessees, emphasizing the importance of the Board's circular in assessment matters.

Issue 3: Binding nature of departmental clarifications and circulars on Courts or quasi-judicial authorities
The Tribunal addressed the argument regarding the binding nature of departmental clarifications and circulars on Courts or quasi-judicial authorities. While the Department argued against their binding nature, citing a Supreme Court decision, the Tribunal emphasized the significance of the circular issued by the Central Board of Excise & Customs. Relying on the Supreme Court's observations and previous Tribunal decisions, the Tribunal allowed the appeals and directed the Asstt. Commissioner to re-assess the assessable value in line with the circular, providing an opportunity to the assessee. The Tribunal clarified that the benefit drawn by the assessee under the Notification should be added to the assessable value.

In conclusion, the Tribunal allowed the appeals by way of remand, emphasizing the importance of the circular and previous decisions in determining the assessable value of the products manufactured by the appellants.