2013 (12) TMI 1343 - AT - Central Excise

Tribunal directs deposit, waives dues pending Appeals. Assessable value principles clarified. Limitation issue under review.

M/s. NEEPAZ TUBE (P) LIMITED AND M/s. TATA STEEL LIMITED (FORMERLY KNOWN AS TISCO) Versus COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, JAMSHEDPUR

The Tribunal directed M/s. Neepaz Tube (P) Ltd. to deposit Rs. 75.00 lakh within 8 weeks, waiving the balance dues and staying recovery during the ... Determination of assessable value - Goods processed/manufactured on job work basis – Waiver of Pre-deposit – Held that:- Held that:- The arrangement was processing/manufacturing of goods on job work basis and the job-worked goods were to be assessed in accordance with the principles laid down in Ujagar Prints Vs. Union of India 1989 (1) TMI 124 - SUPREME COURT OF INDIA] and Pawan Biscuits Co. Pvt. Ltd. Vs. UOI [2000 (7) TMI 78 - SUPREME COURT OF INDIA] – the processed/manufactured goods be assessed to duty at the price at which it was sold by Applicant No.2 - the issue of limitation is a mixed question of facts and law and would be considered at the time of disposal of the Appeal - Applicant No.1 directed to deposit Rupees seventy-five as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted. Issues:1. Waiver of pre-deposit of duty and penalty for M/s. Neepaz Tube (P) Ltd.2. Waiver of penalty for M/s. Tata Steels Ltd.3. Determination of assessable value for goods processed on job work basis.4. Barred by limitation show cause notice.Analysis:1. The judgment deals with applications filed by M/s. Neepaz Tube (P) Ltd. seeking waiver of pre-deposit of duty and penalty, along with M/s. Tata Steels Ltd. seeking waiver of penalty imposed under Rule 26 of the Central Excise Rules, 2002. The Applicants were engaged in processing/manufacturing Black Steel Tubes and Galvanized Steel Tubes on a job work basis. The Revenue contended that the assessment should be based on certain judgments and circulars, while the Applicants argued for assessment based on selling price. The Tribunal directed M/s. Neepaz Tube Pvt. Ltd. to deposit Rs. 75.00 lakh within 8 weeks, with the balance dues waived and recovery stayed during the Appeals' pendency.2. The issue of waiver of penalty for M/s. Tata Steels Ltd. was also addressed in the judgment. The Applicants had appointed an External Processing Agent for conversion and manufacture of goods. The Revenue argued that the agreement was not disclosed to the Department, thus the show cause notice was not barred by limitation. The Tribunal considered the arguments and directed the deposit for M/s. Neepaz Tube Pvt. Ltd., with the waiver of balance dues during the Appeals' pendency.3. The main issue involved the determination of assessable value for goods processed on a job work basis. The Revenue relied on certain judgments and circulars for assessment, while the Applicants cited different judgments supporting their assessment method based on selling price. The Tribunal found that the job work arrangement required assessment according to specific principles laid down in relevant judgments and circulars. The issue of limitation was considered a mixed question of facts and law, to be further examined during the Appeal's disposal.4. The judgment also addressed the issue of whether the show cause notice was barred by limitation. The Revenue argued that the agreement with the External Processing Agent was not disclosed, thus the notice was within the normal period of limitation. The Tribunal noted that the limitation issue would be examined during the Appeal's disposal, emphasizing the need for compliance with the directed deposit to avoid dismissal of the Appeals without further notice.