1998 (4) TMI 317 - AT - Central Excise

Summary

Issues:
Interpretation of Modvat credit in relation to assessable value for electric wires and cables.

Analysis:
The appellants, manufacturers of electric wires and cables, had contracts with customers specifying the mode for determining the Rate Contract, including job charges and the MMTC copper rate on the last date of the prior month's schedule of delivery. The contracts mentioned passing on the countervailing duty paid on copper wire bars as per Modvat rules to customers. Purchase orders reiterated this condition, and invoices reflected the Modvat benefit in assessable values. The appellants argued that previous Tribunal decisions in their favor supported their case, emphasizing that Modvat credit should not be added to the assessable value.

The respondent contended that a Larger Bench decision held that Modvat credit does not automatically reduce the assessable value under Section 4(1)(a). They pointed out that previous cases involving the appellants were remanded, suggesting a similar course for the present cases. However, the Tribunal found that previous decisions in the appellants' favor, including Orders from 1997, supported their stance. Noting the similarity between the impugned order and a previous one, the Tribunal concluded that the Larger Bench decision did not conflict with the appellants' cases. Consequently, the Tribunal set aside the impugned order and allowed all appeals, granting any consequential reliefs to the appellants.

This judgment clarifies the application of Modvat credit to assessable values for electric wires and cables, emphasizing the importance of previous Tribunal decisions in similar cases. It highlights the consistency of decisions in the appellants' cases and the lack of conflict with a Larger Bench decision, ultimately leading to the setting aside of the impugned order and the allowance of all appeals.