1999 (10) TMI 265 - AT - Central Excise

Summary

Issues:
Determining assessable value based on Supreme Court judgment, interpretation of traders' profit margin, compliance with Tribunal's directions, methodology for calculating profit margin, necessity of complete documentation, adherence to Tribunal's orders.

Analysis:
The appeal involved a dispute regarding the assessable value of processed grey fabrics received from merchant manufacturers between March 1982 and January 1989. The issue arose due to diverging opinions on assessable value, which was resolved by the Supreme Court judgment in the case of Ujagar Prints, clarifying that the assessable value should include the value of grey fabrics, processing charges, and job worker's profits, excluding trader's profits declared by merchant manufacturers.

The Assistant Collector's interpretation of the Supreme Court judgment led to a demand for payment from the appellants, which was contested and remanded back to the Assistant Collector by the Tribunal. The subsequent calculation of traders' profit margin by the Assistant Commissioner was questioned for not following the Tribunal's directions and using an arbitrary methodology based on incomplete documentation, leading to a confirmation of the demand.

Upon review, the Tribunal found discrepancies in the Assistant Commissioner's approach, emphasizing the need for accurate determination of traders' profit margin based on available documentation. The Tribunal set aside the previous order, remanding the proceedings back to the Assistant Commissioner with specific instructions to operate within the Tribunal's framework and issue a speaking order within two months.

The Tribunal highlighted the importance of adherence to its directives, cautioning the Assistant Commissioner to follow the prescribed methodology for determining the profit margin. The judgment aimed to ensure compliance with the Tribunal's orders and directed the Chief Commissioner and jurisdictional Commissioner of Central Excise to be informed of the directions for proper implementation.