1997 (12) TMI 244 - AT - Central Excise

Summary

Issues:
1. Inclusion of special packing charges in the assessable value for duty calculation.

Analysis:
The appellant, engaged in manufacturing rubber transmissions belting, was found to be collecting special packing charges amounting to 21% of the value of goods from buyers without producing documents to justify the necessity of such packing. A show cause notice was issued proposing the inclusion of the value of hessian cloth packing in the assessable value for duty calculation. The appellant contended that the special packing was done at the request of buyers and should not be considered abnormal. The Assistant Collector rejected the documents provided by the appellant, stating they were an afterthought and confirmed the demand. The Collector (Appeals) upheld this decision, leading to the appeal.

The appellant's main argument relied on Supreme Court decisions in similar cases, asserting that if hessian cloth packing is used only at the request of specific buyers, its value should not be included in the assessable value for duty calculation. However, the key issue was the fact situation in this case and the evidence presented by the appellant.

The Tribunal noted that while the correct legal principles were clear, the evidence provided by the appellant was insufficient. The show cause notice assumed all goods had special packing, and the appellant's reply only vaguely denied excessive costs without specific details on clearances without hessian cloth packing. The letters from customers provided by the appellant lacked evidence of genuineness and were not supported adequately. The Tribunal concluded that the lower authorities were justified in not considering these letters as genuine due to lack of supporting evidence. Additionally, the Tribunal found that hessian cloth packing was not shown to be used only in specific cases at the request of buyers, leading to the decision that the cost should indeed be part of the assessable value for duty calculation.

Ultimately, the Tribunal found no grounds to interfere with the lower authorities' decision and dismissed the appeal, affirming the inclusion of special packing charges in the assessable value for duty calculation.