2000 (3) TMI 289 - AT - Central Excise

Summary

Issues Involved:
The issues involved in the judgment are the inclusion of the cost of packing materials supplied by the buyer in the assessable value of adhesives manufactured, the invocation of the extended period of limitation, the relationship between the manufacturer and the purchaser as 'related persons,' and the challenge to the decision of the Commissioner based on principles of res judicata and limitation.

Inclusion of Packing Materials Cost in Assessable Value:
The appeal by the Revenue challenged the inclusion of the cost of packing materials supplied by the buyer in the assessable value of adhesives manufactured. The manufacturer contended that the cost of packing materials cannot be added as they were supplied free to the purchaser. The Tribunal allowed the appeal, holding that the cost of packing materials cannot be included in the assessable value.

Invocation of Extended Period of Limitation:
Another show cause notice was issued for a different period, and it was held that the extended period of limitation was not invocable since nothing was suppressed from the Department. The proceedings were dropped, and the order attained finality as Revenue did not appeal. Subsequently, a third show cause notice was issued, alleging the manufacturer and purchaser as 'related persons.' The Commissioner dropped the proceedings based on principles of res judicata and limitation.

Relationship Between Manufacturer and Purchaser:
The relationship between the manufacturer of adhesives and the purchaser was governed by an agreement known to the Department. Previous show cause notices were issued and adjudicated upon, ending in favor of the manufacturer. The Department's attempt to revisit the same agreement for new material was deemed impermissible based on earlier orders and Tribunal decisions.

Conclusion:
The Tribunal emphasized that the Department's attempt to reopen a concluded issue was not tenable, especially considering the inconvenience caused to a small-scale industrial unit. It was noted that the appellate power should not be used to unnecessarily harass manufacturers. Consequently, the appeal was dismissed.