2000 (11) TMI 373 - AT - Central Excise

Issues:
1. Assessment of goods value including various components.
2. Demand of duty on Advertisement cost.
3. Ownership of materials during assembly/packing on job work basis.
4. Applicability of Ujagar Prints decision and Pawan Biscuits case.
5. Liability for duty payment and discharge.

Analysis:

1. The appeal involved the assessment of goods value by M/s. Krishnan & Associated Engineers, manufacturers of razor blades, and razors. Assessments were made provisionally under Rule 9(B) due to missing components enriching the value. Subsequently, 18 show cause notices (SCN) were issued, along with additional demands for duty on Advertisement cost by M/s. Indian Shaving Products (ISPL). The Commissioner remanded the case back to the Assistant Commissioner due to a separate SCN issued by the Addl. Director General for the same goods. The Commissioner invoked Rule 6 of the Central Excise Rules, 1944, to decide on the SCN amendments and the demands related to Advertisement cost.

2. The Commissioner, after reviewing submissions, found that ISPL owned the material during assembly/packing, and ISPL was considered the manufacturer of the goods. The Commissioner referred to the Ujagar Prints decision and the Pawan Biscuits case to determine the assessable value based on the selling price by ISPL. Duty was confirmed based on consumer price less sales tax and excise duty for 17 SCN, while the 18th SCN applied the amended Section 4 for determining the ex-depot price. Some demands were confirmed, while others were dropped based on the period and previous decisions.

3. The Commissioner stated that the duty liability primarily lies on the party, but it could be discharged if proof of payment by ISPL was provided. However, the Tribunal disagreed with this finding, stating that the Act and rules specify that duty shall be levied on the manufacturer, and payment by ISPL cannot be considered as discharge of duty under Rule 7 of the Central Excise Rules. The Tribunal set aside the impugned order and allowed the appeal based on these findings.

4. The Tribunal disagreed with the Commissioner's finding that the present case was identical to the Pawan Biscuits case and that the Ujagar Prints decision did not apply. The Tribunal referenced a Supreme Court decision in the Pawan Biscuits case, which found similarities with the Ujagar Prints case. Therefore, the Tribunal concluded that the Commissioner's basis for confirming demands was not valid, and the order could not be upheld.

5. The demand on Advertisement charges confirmed by the Commissioner was also challenged by the Tribunal, stating that without considering a Supreme Court decision in the case of Philips India Ltd., the demand could not be upheld. The Tribunal set aside the order due to the lack of valid reasons to uphold any demand and highlighted that the Commissioner's finding regarding the discharge of duty by ISPL on behalf of the party was not supported by the Central Excise Act or rules, leading to the appeal being allowed.

← Previous Next →