2014 (10) TMI 158 - AT - Central Excise

Demand of differential duty - Difference in value of goods - Held that - Similar issue came up before the Hon ble Apex Court in the case of International Auto Ltd. Vs. Commissioner of Central Excise, Bihar reported in 2005 (3) TMI 132 - SUPREME COURT OF INDIA wherein it was held that the appellants are not required to pay duty on the free supplies by the principle manufacturer, who after receiving the intermediate products have cleared the finished goods on payment of duty. In appellant s own case also, this Tribunal has held that appellants are not required to pay differential duty in the similar situation. Therefore, following the decision in appellant s own case, we hold that in this appeal also the appellants are not required to pay differential duty as demanded. - Decided in favour of assessee.

Summary

Issues:
- Appeal against confirmed demand of duty, interest, and penalties.
- Whether duty is payable on the differential value of goods supplied by the principal manufacturer to the job worker?

Analysis:
1. The appellants appealed against an order confirming the demand of duty, interest, and penalties. The case involved the appellants, who were job workers for M/s. Bharat Earth Movers Ltd. (M/s. BEML). M/s. BEML supplied material to the appellants free of cost for manufacturing assemblies. The appellants cleared the assemblies to M/s. BEML after paying duty on the aggregate price declared for their job charges. The revenue contended that duty should be paid on the price differential between goods sold in the open market by M/s. BEML and the price declared to the appellants.

2. The tribunal considered a similar issue addressed by the Hon'ble Apex Court in the case of International Auto Ltd. vs. Commissioner of Central Excise, Bihar. In that case, it was held that duty is not payable on free supplies by the principal manufacturer if the finished goods are cleared on payment of duty. Additionally, in the appellant's own case, a previous tribunal order had ruled that the appellants were not required to pay differential duty in a similar situation. Therefore, the tribunal applied the precedent set in the appellant's case and held that the appellants were not liable to pay the demanded differential duty.

3. Based on the precedents and the specific circumstances of the case, the tribunal set aside the impugned orders and allowed the appeals of the appellants. The decision was made in favor of the appellants, concluding that they were not obligated to pay the differential duty as demanded by the revenue. The judgment provided consequential relief to the appellants, if any, in accordance with the decision rendered.

This detailed analysis of the judgment highlights the key legal issues, the arguments presented, the relevant precedents considered, and the final decision reached by the tribunal in favor of the appellants.