2005 (4) TMI 398 - AT - Central Excise

Revenue's Appeal Dismissed in Medicaments Manufacturing Assessment Dispute

The Revenue's appeal challenging the assessment value determination for manufacturing Medicaments under technical collaboration with M/s. Lyka Labs was ... Valuation Issues: Revenue appeal challenging the assessment value determination based on technical collaboration for manufacturing Medicaments.Analysis:The appeal filed by Revenue challenges the assessment value determination concerning the manufacturing of Medicaments under technical collaboration with M/s. Lyka Labs Ltd. The crux of the issue lies in the disagreement over whether the assessable value should be based on the price at which Lyka Labs sold the goods or the sale price of the assessee to Lyka Labs.The lower authorities determined the value for assessment in favor of the assessee, leading to the Revenue's grievance. The Commissioner (Appeals) emphasized the need for the department to establish the relationship and mutuality of interest between the appellant and M/s. Lyka Labs under the Central Excise Act, 1944. Specifically, Section 4(1)(a)(iii) was cited, requiring corroborative evidence to prove any extra commercial consideration resulting from the technical collaboration. However, the Commissioner found no material evidence supporting the Revenue's claim, ultimately dismissing the appeal.The crux of the matter was the absence of concrete evidence demonstrating any additional commercial benefit derived from the technical collaboration that would have influenced the sale price of the assessee. The Commissioner's decision was based on the lack of substantiating material presented by the Revenue, leading to the dismissal of the appeal. Consequently, the Revenue's appeal was dismissed, upholding the Commissioner's decision regarding the assessment value determination in the case of manufacturing Medicaments under technical collaboration.