2005 (98) ECC 343 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(A)

Ms. Jyoti Balasundaram, Vice President and Shri V.K. Agrawal, Member (T)

Commercial Engg. Body Builders & Kailash Auto Builders Ltd.

Versus

CCE, Bhopal

Appeals No. E/2550-55, 2831-2834, 3200, 3208, 3205 to 3207, 3240-47/2004-NB-A

[Arising out of Order-in-Appeal Nos. 37-42/CE/BPL/2004 dt. 19.2.2004, 82-85/CE/BPL/2004 dt. 25.2.2004, 139/CE/BPL/2004 dt.23.3.2004, 162/CE/BPL/2004 dt.23.3.2004, 157-159/CE/BPL/2004 dt. 23.3.2004, 143-150/CE/BPL/2004 dt. 23.3.2004 passed by the Commissioner of Central Excise (Appeals), Bhopal]

Final Order No. 1032 to 1054/2004-NB(A), dt. 27.9.2004, Certified on 11.10.2004

Demand and Penalty (C. Excise)

Valuation where independent job worker processes goods and returns to this to their supplier's prescription of other `places of removal' will not make any difference and for such goods valuation can be done on the basis of price of comparable goods under Rule 6(b)(i) or failing that, under Rule 6(b)(ii) of the valuation rules on basis of cost of manufacture plus notional profit in order to arrive at the nearest ascertainable equivalent of price under Section 4(1)(9) -- Duty demand and penalties unsustainable.

[Para 3]

Appeal allowed.

PRESENT :

Shri A.R. Madhav Rao, Advocate for the appellants.

Ms. K.A. Mishra, SDR for the respondent.

Case Cited :

IPF Vikram India Ltd. 2003 (160) ELT 1017......................................................... [Para 3]

Per : Ms. Jyoti Balasundaram

Appellants herein were undertaking job work of fabrication of vehicle body on duty paid chassis supplied by M/s. TELCO. Duty demands were confirmed against them by adopting the price at which built up vehicles were sold by Telco from its Depots to customers and penalties were also imposed upon them. Hence, these appeals.

2. Details of duties and penalties are set out in the Annexure to this order.

3. We have heard both sides. Appellants rely upon Board's Circular No. 251/85/96-CX dated 14.10.96 to support their contention that they are liable to pay duty on the basis of cost of manufacture plus notional profit and also upon Tribunal's decision in IPF Vikram India Ltd. 2003 (160) ELT 1017, wherein, applying the circular, it has been held that if an "independent job worker processes goods and returns this to their supplier, the prescription of other "places of removal" will not make any difference and for such goods the valuation can be done on the basis of price of comparable goods under Rule 6(b)(i) or failing that, under Rule 6(b)(ii) of the Valuation Rules on the basis of cost of manufacture plus notional profit in order to arrive at the nearest ascertainable equivalent of the price (as stipulated under Section 4(1)(a)......"

4. Learned Departmental Representative reiterates the finding of the authorities below.

5. We see force in the submission of the appellant on the basis of the circular and the judgment cited supra which are on all fours with the facts of the present case. Following the ratio thereof we hold that the duty demand and penalties are not sustainable and therefore set aside the impugned orders and allow the appeals.

6. E/3200/2004-A : Although the adjudicating authority dropped the demand as time barred and the Commissioner (Appeals) set aside his order by holding that the duty demand was within time, and there was no finding on the correct method of valuation of the goods manufactured by the appellants on job work basis for M/s. TELCO, in view of our orders on merits in the other appeals of M/s. Commercial Engineers & Body Builders Co. Pvt. Ltd. and M/s. Kailash Auto Builders Ltd. we set aside the demand and penalty in this case also as unsustainable and allow the appeal.

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