2017 (3) TMI 1622 - AT - Central Excise

Appellant wins relief from duty, packing charges included, Modvat inputs not cleared, no intent for penalties.

Teakrafts Versus Commissioner of Central Excise, Coimbatore

Teakrafts Versus Commissioner of Central Excise, Coimbatore - 2017 (358) E.L.T. 389 (Tri. - Chennai) Issues:1. Whether the appellant cleared manufactured goods as bought out items.2. Inclusion of packing charges in the assessable value of goods.3. Removal of Modvat availed inputs in the guise of bought out items.Analysis:1. The appellant argued that there was no evidence to prove they manufactured traded goods. The authority allowed relief where traded goods matched sale invoices, but piecemeal duty imposition is impermissible. Lack of evidence supporting Revenue's claim led to the appellant's success in this issue.2. Regarding packing charges, the adjudicating authority did not provide a valid reason for their inclusion in the assessable value of goods. The appellate authority upheld this decision, stating that the packing was essential for goods removal. Consequently, the appellant did not succeed on this point.3. The Revenue alleged that Modvat inputs were cleared as bought out items, but the appellant contended that necessary reversals were made when required. As the Modvat inputs were not traded goods, their clearance warranted duty levy. Therefore, the appellant did not succeed on this issue.4. Penalties were discussed, with the appellant denying any contumacious conduct or deliberate intention to evade. Since there was no evidence of intent to prejudice the revenue, penalties were not imposed on the appellant. As a result, the appeal was partly allowed only on specific grounds indicated in the judgment.