1999 (11) TMI 290 - AT - Central Excise

Summary

Issues:
1. Inclusion of value of artwork and printing screens in the assessable value of labels.
2. Loading factor of 0.20% on clearance value in the absence of specific data.
3. Application of limitation period for demands made under show cause notice dated 15-4-1993.

Issue 1: Inclusion of value of artwork and printing screens:
The appellants manufactured labels, and it was alleged that the value of artwork and printing screens received from customers free of charge was not considered in determining the assessable value of the labels. The Collector held that the value of artwork should be included in the assessable value of the final product. The appellants claimed that the cost incurred on these items would be part of the pricing of the labels. The Tribunal, following previous judgments, held that the value of artwork and printing screens should be included in the assessable value of the labels.

Issue 2: Loading factor of 0.20% on clearance value:
The department resorted to loading 0.20% of the clearance value in the absence of specific information from the assessees. The assessees made contradictory claims about the origin of the artwork. The Tribunal found that the lack of cooperation continued, and the evidence presented, including a certificate from a Chartered Accountant, was not considered valid due to insufficient details. The Tribunal upheld the department's loading of the percentage value due to the total lack of data provided by the assessees.

Issue 3: Application of limitation period:
The demand made under the show cause notice dated 15-4-1993 covered a period of six years, including 1987-88. The assessees argued that the demand for the earlier period was not sustainable due to the department's awareness of their practices from previous proceedings in 1988. However, the Tribunal held that the proceedings in 1988 were not relevant to the issue raised in 1993 regarding the inclusion of expenses of artwork in the assessable value of labels. The Tribunal modified the demand amount, considering the limitation period and upheld the order of the Collector, remitting the proceedings for reworking the demand under the show cause notice dated 15-4-1993.

This judgment addressed the issues of including the value of artwork and printing screens in the assessable value of labels, the application of a loading factor on clearance value in the absence of specific data, and the limitation period for demands made under a show cause notice. The Tribunal upheld the inclusion of artwork value, justified the loading factor due to lack of cooperation from the assessees, and clarified the application of the limitation period based on previous proceedings and the specific issue raised in the case.