1997 (12) TMI 399 - AT - Central Excise

Summary

Issues:
Assessment of excise duty based on selling price vs. cost of production, inclusion of duty paid on raw materials in the value of finished goods.

Analysis:
The case involved a dispute regarding the assessment of excise duty on color TV sets assembled by the respondent from TV kits. The Revenue alleged that the duty should be calculated based on a circular recommendation, resulting in a higher duty amount. However, the respondent argued that the selling price of the TV sets should be the assessable value, which was lower than the amount claimed by the Revenue.

The Assistant Collector confirmed a higher duty amount and imposed a penalty on the respondent. In appeal, the lower appellate authority ruled in favor of the respondent, stating that when the selling price under Section 4(1)(a) is available and undisputed, there is no need to assess duty based on the cost of production under Section 4(1)(b).

The appellant-Collector argued that the duty should be based on a minimum selling price calculated from the cost of production, relying on legal precedents such as the Supreme Court's judgment in C.C.E. v. Mysore Paper Mills Ltd. and Tribunal's judgment in Srinivasan Foundry case.

However, the respondent's consultant contended that the lower appellate authority's decision was correct as the selling price was not disputed by the Revenue, and duty should not be assessed based on the cost of production if the selling price is available under Section 4(1)(a).

The Tribunal agreed with the respondent, emphasizing that as long as the selling price under Section 4(1)(a) is available and undisputed, there is no need to delve into valuation under Section 4(1)(b). The Tribunal distinguished the legal precedents cited by the appellant-Collector, stating that they were not applicable to the present case where the selling price was clear and uncontested.

Ultimately, the Tribunal dismissed the Revenue's appeals and upheld the lower appellate authority's decision, concluding that the duty should be based on the selling price when it is available and undisputed, without considering the cost of production.