1998 (6) TMI 237 - AT - Central Excise

Summary

Issues:
1. Duty determination on surplus motor vehicle parts under Chapter X procedure.
2. Applicability of Rule 196 vs. Rule 196A of the Central Excise Rules, 1944.
3. Interpretation of assessable value for duty payment.

Analysis:
1. The case involved the appellant receiving duty paid Motor Vehicle Parts for industrial use under Chapter X procedure. Surplus parts were removed from the factory, and a show cause notice demanded duty payment on the assessable value of these parts based on wholesale prices. Despite resistance, the demand was confirmed by lower authorities, leading to the appeal.

2. The appellant cited Final Order Nos. 768 and 769/86-B1, which the lower authorities deemed inapplicable as they were under Rule 196, unlike the present case under Rule 196A. The appellant argued that the principles from the earlier order should apply to the current situation.

3. Examining Final Order Nos. 768 & 769/86-B, it was found that duty under Rule 196 is to be paid on parts not duly accounted for. The Rule specifies dates for duty rate and valuation, not assessable value under Section 4(1) of the Central Excise Act, 1944. The absence of a provision for assessable value dates restricts valuation to the price at the goods' clearance by the manufacturer.

4. Rule 196A(i) governs the current case, where surplus goods were cleared with duty payment approval. The rule states duty is based on the rate and valuation on the date of actual removal. As Rule 196A also lacks a specific assessable value date, the price at the manufacturer's clearance should determine the assessable value for duty payment.

5. Therefore, the Tribunal applied the principle from the earlier case under Rule 196 to the present situation under Rule 196A, setting aside the impugned order and allowing the appeal. The demand for differential duty was deemed unsustainable based on the valuation principles discussed.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on the interpretation of relevant rules and principles.