1999 (9) TMI 427 - AT - Central Excise

Summary

Issues:
1. Valuation of goods manufactured on job work basis
2. Time bar under Section 11A of Central Excises and Salt Act, 1944

Valuation of Goods Manufactured on Job Work Basis:
The appeal concerned the valuation of Engine Mounting Pads manufactured on job work basis. The Commissioner confirmed a differential duty and imposed penalties based on the valuation adopted by the appellants for sales to M/s. Ashok Leyland Ltd. The Commissioner held that the price at which the appellants sold the item to other buyers should be applied to sales to M/s. Ashok Leyland, despite raw materials being supplied by them. The Commissioner found suppression of facts, leading to the invocation of a larger period for duty demand and imposition of penalties. The appellant argued that the price for sales to M/s. Ashok Leyland should differ due to the supply of raw materials and job work basis, citing the Ujagar Prints case. The appellant contended that no suppression occurred as all details were disclosed, and invoices clearly showed raw material costs. The Tribunal agreed with the appellant, citing the Ujagar Prints case and the principle that valuation for job work basis should include raw material value, job work, manufacturing profit, and processing expenses. The Tribunal also noted the Cetex Petrochemicals case and held that the Revenue failed to establish suppression, thus rejecting the invocation of a larger period and penalties.

Time Bar under Section 11A:
Regarding the time bar under Section 11A of the Central Excises and Salt Act, the appellant argued that the Revenue could not invoke a larger period as they were under invoice price assessment, had filed necessary returns and documents, and there was no evidence of suppression. The Tribunal concurred, stating that the Revenue failed to justify invoking a larger period or imposing penalties due to the absence of suppressed facts. The Tribunal emphasized that the Revenue was aware of all facts through the invoice price assessment and returns filed, leading to the dismissal of the time bar and penalties. Ultimately, the Tribunal set aside the Commissioner's order, allowing the appeal based on the principles established in the Ujagar Prints case and subsequent Tribunal decisions, including the Cetex Petrochemicals case.

In conclusion, the Tribunal's judgment revolved around the correct valuation of goods manufactured on a job work basis and the time bar under Section 11A. The Tribunal upheld the appellant's arguments, emphasizing the differentiation in pricing for job work basis sales, the absence of suppression of facts, and the Revenue's failure to establish the need for a larger period or penalties. The decision was based on established legal principles and previous case law, leading to the appeal being allowed and the impugned order being set aside.