2003 (3) TMI 439 - AT - Central Excise

Summary

Issues:
1. Whether royalty collected from bottlers is liable to be added to the assessable value of the concentrate for duty payment.
2. Whether the concentrate should be classified under excise tariff heading 2107.99 at 20% ad valorem or under tariff heading 33.02 at 25% ad valorem.

Analysis:
1. The Tribunal, in a previous decision, held that royalty charges for using a brand name by bottlers on beverage products from concentrates purchased from the appellant should be included in the assessable value of the concentrate. This decision goes against the appellant's challenge regarding royalty inclusion.

2. The appellant argued that their concentrate should be classified under heading 2107.99 based on a Board's order and a trade notice. They cited precedents where it was allowed to question the rate of duty when assessments are reopened. The appellant contended that the Board's directive should apply to pending matters with classification disputes. The Departmental Representative argued against applying the Board's order retroactively.

3. The Tribunal agreed with the appellant's classification argument, stating that the clarification on the classification of Synthetic Soft Drink Concentrate should apply to pending matters. Therefore, the concentrate should be classified under sub-heading 2107.99, attracting a duty rate of 20% ad valorem instead of 25%.

4. The appellant provided a calculation for the payable differential duty based on the revised classification. The Tribunal found merit in the appellant's argument and modified the order, reducing the duty payable to Rs. 25,26,501. The Revenue's contentions against applying the Board's circular were not supported by any errors in the appellant's calculation.

In conclusion, the appeal was partly allowed, with the Tribunal ruling in favor of including royalty charges in the assessable value of the concentrate and classifying the concentrate under sub-heading 2107.99 for duty payment at a rate of 20% ad valorem. The differential duty payable was adjusted to Rs. 25,26,501 based on the revised classification.