1999 (12) TMI 208 - AT - Central Excise

Summary

Issues involved: Valuation of Oxygen for Central Excise Duty including compensation for non-supply.

Valuation of Oxygen: The appeal filed by the Revenue pertained to the valuation of Oxygen and the demand of Central Excise Duty concerning the compensation amount to be paid by the assessee for non-supply of Oxygen to Hindusthan Copper Ltd., a public sector undertaking. The Revenue contended that the minimum of take guarantee amount and compensation for non-supply should be added to the assessable value, as agreed upon by the Commissioner of Central Excise (Appeals).

Non-Appearance of Respondent: In the absence of representation from M/s. Bhagwati Oxygon Ltd., a request for adjournment was made due to the unavailability of their counsel. Despite the old nature of the matter dating back to 1990, with the original order issued in 1995, the Tribunal proceeded to hear the case on its merits after being represented by Shri R.K. Roy, JDR for the Revenue.

Commissioner's Observations: The ld. Commissioner of Central Excise (Appeals) noted that no duty could be charged based on compensation for non-supply of goods when no production had taken place. He questioned the rationale behind charging Central Excise duty in the absence of manufacturing and removal of excisable goods, stating it was illogical to consider compensation for non-supply as additional consideration to be included in the assessable value of previous supplies.

Decision of the Tribunal: Upon reviewing the impugned order and the grounds of appeal, the Tribunal found no justification to overturn the Commissioner's decision. Consequently, the appeal filed by the Revenue was dismissed for lacking merit, upholding the Commissioner's ruling regarding the valuation of Oxygen and compensation for non-supply.