TMI Blog2018 (12) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... lmost identical circumstance that the Tribunal held in Commissioner of Central Excise, Mumbai – II v. Jyoti Structures Ltd [2004 (5) TMI 358 - CESTAT, NEW DELHI] that ‘destruction testing’ erases the prototype out of existence and, thereby, of dutiability. The various elements of the ascertained assessable value suffer from infirmities - To determine any deficit in the value adopted for assessment in comparison with the price declared as per the contract, the exercise requires to be carried out afresh in the light of our observations on these elements - matter remanded back to the original authority to re-determine the acceptability of the declared price for assessment and the duty liability, if any, arising from unaccounted value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials used in manufacture, the cost of steel and zinc supplied by the principal was recomputed, and to which was added local freight and the conversion charges, based on the rate incorporated in the conversion agreement and the additional amount of ₹ 2,365 per metric ton for which bill had been raised by the appellant, to arrive at revised assessable value ₹ 27,841 and ₹ 36,417 for MS steel parts and ₹ 30,017 and ₹ 40,522 for HT steel parts for 2003-04 and 2004-05. Further duty of ₹ 1,83,064 on the value of prototype erection and dismantling on which duties had not been discharged by the appellant was also held to be leviable. The consequent confirmation of demand proposed in the show cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opted in the findings of the lower authorities. In the impugned order, the recovery of prime material in the conversion process has been assumed to be 5% against the 0.007% established empirically by the appellant. 5. Learned Counsel for appellant relies upon the decision of the Tribunal in PR Rolling Mills Pvt Ltd v. Commissioner of Central Excise, Tirupathi [2010 (249) ELT 232 (Tri-Bang)] which was approved by Hon ble Supreme Court, in Campco Chocolate Factory v. Commissioner of Central Excise, Mangalore [2010 (258) ELT 273 Tri-Bang)] and in Ad-Manum Packaging Ltd v. Commissioner of Central Excise, Indore [2016 (341) ELT 348 (Tri-Del)] . 6. On the other hand, Learned Authorised Representative relies upon the decision of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention raised by the Revenue that these testing are conducted in relation to the goods manufactured by the assessee, namely, parts of transmission towers. Parts are cleared from the factory after undergoing required quality test. The charges for the destruction test which is conducted on the prototype towers cannot therefore be added to the assessable value of the goods manufactured by the Respondent. and thus according finality to the present dispute on that score. An earlier decision of the Tribunal in Commissioner of Central Excise, Mumbai II v. KEC International Ltd [1998 (102) ELT 621 (Tribunal) ] noted a similar lack of evidence to sustain the claim of Revenue that prototypes, subjected to destruction, are excisable goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Authorised Representative, with the relationship between principal and job worker at arm s length, this determination would be the appropriate assessable value. He contends that it was thus that the central excise authorities directed the inclusion of value of scrap generated, and retained, by the appellant for assessment. He submits that finality on this has been attained with the decision of the Hon ble Supreme Court in General Engineering Works v. Commissioner of Central Excise, Jaipur [2007 (212) ELT 295 (SC) ] stipulating that 5. It must be clarified that the value of scrap would be included in the value of the points and crossings only in case where it is shown that the conversion charges get depressed by the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. In these circumstances, the addition of value of scrap to the value of clearances is not in conformity with the decision of the Hon ble Supreme Court supra. Furthermore, the claim of the appellant that the show cause notice had erred in attributing wastage of 5% cannot be ignored; more so, as it has been demonstrated by appellant that the scrap generated was negligible. Therefore, the inclusion of value of scrap in the computation of assessable value does not have the sanctity of law. 11. It is seen that the exercise of ascertaining the appropriate assessable value did assign a value to the material supplied by the principal. It is apparent from the contract that these materials, though paid for by the principal, were received f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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