2012 (11) TMI 480 - AT - Central Excise

Demand of duty - manufacture of various Machineries and Bulkers Held that - Cabins are built up by M/s. Commercial Engineers & Body Builders Co. Ltd. and clearing the same under benefit of Notification No.5/98-CE dt. 2.6.1998 without payment of duty - cabins are fabricating by the job worker and job worker is liable to pay duty in respect of the cabin and job worker being independent manufacturer is availing the benefit of notification - duty by adding Rs.45,000/- to the assessable value of bulkers cannot be confirmed against the present assessee, who is manufacturing bulkers - job worker is wrongly availing the benefit of Notification No.5/98-CE dt. 2.6.98 the job worker is liable to pay duty and not the present assessee

Summary

Issues:
1. Whether charges for cabin making should be added to the assessable value of bulkers.
2. Whether service charges of 5% should be included in the assessable value of bulkers.

Analysis:
1. The appeals were filed by both the Revenue and the assessee against the impugned order. The assessee, engaged in manufacturing machinery and bulkers, received duty paid bare chassis for bulker fabrication. Duty paid bare chassis were sent to a job worker for cabin fabrication, with the job worker clearing the cabins under an exemption notification. The assessee then fabricated the bulkers and paid duty on the assessable value. A show cause notice was issued to add cabin making charges to the assessable value of each bulker, along with 5% service charges. The Commissioner (Appeals) set aside the demand for cabin making charges. The Revenue contended that cabin building charges should be added to the assessable value, but the Tribunal held that the job worker, not the present assessee, was liable to pay duty on cabins. The appeal by the Revenue was dismissed.

2. The assessee challenged the inclusion of 5% service charges in the assessable value of bulkers. The Tribunal found that the service charges were for coordination and procurement of materials for the bulkers manufactured by the assessee. Therefore, the service charges were to be added to the assessable value of the bulkers. The appeal by the assessee was also dismissed. Consequently, both appeals were dismissed by the Tribunal.

This judgment clarifies the liability for duty payment on cabin making charges and service charges in the context of bulkers manufacturing. The Tribunal differentiated between the responsibilities of the job worker and the manufacturer, providing a clear rationale for dismissing both appeals.