Tribunal rules isomerisation charges part of assessable value, buyer's request key. Duty applies despite goods not returned.

The Tribunal allowed the appeal in favor of the Department, setting aside the Collector (Appeals)' order that isomerisation charges should not be included in the assessable value of goods. The Tribunal held that the isomerised tubes, which enhanced the marketability of the product, were specifically requested by the buyer at a higher price inclusive of isomerisation charges. Therefore, the higher value, including the charges, should be subject to duty, despite the goods not returning to the factory after the process. The respondent's cross-objection was also disposed of accordingly.

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Issues:
- Authorization for filing appeal under Section 35B(2) of the Central Excise Act
- Inclusion of isomerisation charges in the assessable value of goods

Analysis:

1. The case involved a dispute regarding the duty payable on aluminium products sold by the respondent during specific periods in 1986. The respondent was selling goods at declared prices and paying duty, but a small percentage of goods underwent isomerisation at B.A.R.C. Bombay before being sold to a particular buyer. The Department issued a show cause notice for demanding differential duty based on the isomerisation process charges.

2. The respondent objected to the appeal, arguing that it lacked proper authorization under Section 35B(2) of the Central Excise Act. The authorization in question was issued by the Collector of Central Excise, specifically empowering the Assistant Collector to file the appeal. The Tribunal found no defect in the authorization, rejecting the respondent's claim of inadequacy.

3. The Collector (Appeals) had previously set aside the demand for differential duty, ruling that isomerisation charges should not be included in the assessable value of the goods. The Collector considered the small percentage of goods subjected to isomerisation, the availability of factory gate prices, and the location of the isomerisation process outside the respondent's premises.

4. However, the Tribunal disagreed with the Collector (Appeals)' decision, stating that the buyer specifically requested isomerised aluminium tubes and was willing to pay a higher price inclusive of isomerisation charges. The contract between the parties was for the supply of isomerised tubes, which enhanced the marketability of the product. Therefore, the Tribunal concluded that the higher value, including the isomerisation charges, should be subject to duty, regardless of the goods not returning to the factory after the process.

5. Consequently, the Tribunal set aside the Collector (Appeals)' order and allowed the appeal in favor of the Department. The cross-objection filed by the respondent in support of the original order was also disposed of accordingly.

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