2018 (7) TMI 1590 - CESTAT MUMBAI

Valuation - Manufacture of Mild Steel Drums on job work basis - Whether the appellant have taken correct cost of raw material i.e. CRS sheets for arriving at correct assessable value? - Held that:- In order-in-original the adjudicating authority has taken different cost of raw material and the duty was re-quantified by enhancing from ₹ 75,40,706/-, which was originally confirmed to ₹ 2,31,30,925/. Firstly the unit cost per drum was given by the C.A. of BPCL and HPCL. The department has not adduced any evidence which is contrary to C.A. certificate provided by HPCL and BPCL therefore the unit per cost provided by BPCL and HPCL has to be accepted - it can be seen that it is appellant’s appeal challenging the demand of ₹ 75,40,706/- therefore without filing an appeal by the department proposing enhancement of demand, appellant by filing an appeal cannot be in the worse position by which demand is increased therefore the demand of ₹ 75,40,706/- in any circumstance could not have been increased to ₹ 2,31,30,925/- - demand set aside.

Whether the cost of bought out lid supplied along with drums is includible in the assessable value of drums? - Held that:- For the manufacture of drum there is no role of lid. The drum is manufactured without lid. It is also noticed that in the previous occasion appellant had been supplying the drums without lid. It is also fact that in all cases of manufacture and supply of drums lid was not supplied. However, only in some cases and for limited period bought out lid was supplied along with drums - the cost of lid cannot be included in the value of drums - demand set aside.

Whether the profit element appearing in balance sheet of the appellant is includible in the assessable value of the drum when the fabrication cost paid by the principle, M/s. BPCL and HPCL as already been included? - Held that:- Profit which is appearing in the balance sheet is arrived out of receipt of fabrication charges which already included profit which is appearing in the balance sheet. There is no case of the department that appellant have received some additional consideration over and above the job charges received from the principals HPCL and BPCL, therefore profit appearing in the balance sheet which is part of the fabrication charges cannot be again included in the assessable value of the drum, demand to this extent is also not sustainable - demand set aside.

Whether the value of the scrap retained by the appellant and realised proceeds by selling scrap in the market can be added in the assessable value of the drums? - Held that:- The appellant have paid duty on the scrap value and the same value was sought to be included in the assessable value of drums. Once the value has suffered the duty, demand of duty on such value will amount to duplication of demand - demand set aside.

Revenue neutrality - Held that:- In one hand appellant was otherwise entitle for the manufacture and clearance the goods without payment of duty under Rule 4(5)(a) and if at all duty is payable the same is available as Cenvat credit to the BPCL and HPCL, therefore entire case is of revenue neutral.

Demand do not sustain - appeal allowed - decided in favor of appellant.