1997 (10) TMI 216 - AT - Central Excise

Summary

Issues:
1. Valuation of P.P. Caps in relation to the assessable value of containers under the Central Excise Act.

Analysis:
The appeal before the Appellate Tribunal CEGAT, Mumbai stemmed from a dispute regarding the valuation of P.P. Caps in relation to the assessable value of containers under the Central Excise Act. The Department contested the decision of the Collector of Customs and Central Excise (Appeals), Mumbai, which did not include the value of P.P. Caps in the assessable value of the container. The Department argued that the agreement between the parties involved the supply of containers with P.P. Caps, and consideration had been exchanged accordingly. The Department contended that the P.P. Caps were brought to the assessee's factory and then sent to the customers along with the containers. However, the original authority rejected the assessee's contention, stating that the P.P. Caps were brought to the factory and then supplied to a customer, indicating a trading activity. The Assistant Collector confirmed the Show Cause Notice, leading to an appeal before the Collector (Appeals).

The Collector (Appeals) held that the containers were removed without being fitted with P.P. Caps, and it was unnecessary for the appellants to bring P.P. Caps inside the factory premises. The P.P. Caps were used only after the containers were filled with the buyer's product, FINIT, and were classified under a different heading. Consequently, the Collector agreed with the respondent's contentions and allowed the appeal, prompting the Department to appeal against this decision.

During the hearing, the Department argued that the agreement between the parties encompassed the supply of containers with P.P. Caps, emphasizing that the entire product, including the P.P. Caps, should be considered for valuation purposes. However, the Tribunal, after considering the arguments presented in the absence of the respondent, found that the grounds of appeal did not specifically mention the inclusion of the value of P.P. Caps for valuation. The Tribunal noted that the excise duty is levied on the manufacture of goods and not for maintaining registers, thereby rejecting the Department's argument. Consequently, the Tribunal dismissed the appeal, affirming the decision of the Collector (Appeals).

In conclusion, the Appellate Tribunal CEGAT, Mumbai, upheld the decision of the Collector (Appeals) regarding the valuation of P.P. Caps in relation to the assessable value of containers under the Central Excise Act, emphasizing that the excise duty is charged on the manufacture of goods and not for maintaining registers.