2016 (3) TMI 893 - AT - Central Excise

Tribunal confirms valuation of printed packing materials for cigarettes, dismisses Revenue's appeal.

Commissioner of Central Excise, Mumbai-V Versus GTC Industries Ltd.

The Tribunal upheld the first appellate authority's decision, rejecting the Revenue's appeal regarding the valuation of captively consumed printed packing ... Valuation of the captively consumed different types of printed packing materials usually of paper and paperboard - Held that:- Firstly, we find that the costing of the product, cigarettes was also a disputed issue and for the period prior to the period in question in this case, the respondent were directed to prepare the costing and assessable value of the product on the basis of Assistant Director (Cost) recommendation dated 10/11/1993 which was done so by the respondent for the period prior to and also subsequently. It cannot be now said that the appellant had suppressed the entire material from the department for discharging short duty. Secondly, it seen that the respondent had produced various documents before the first appellate authority in order to justify their stand of the correctness of the valuation adopted and discharge of duty liability. There is nothing on record to show the said factual position is controverted by the Revenue.Also the first appellate authority has correctly come to the conclusion that there cannot be any suppression of facts or misstatement or collusion on the part of the respondent for invoking the extended period, for the simple reason that the final products manufactured by the respondent are cigarettes, which during the period, was under physical control of the departmental officer, who is regularly posted at the respondent's factory - Decided against revenue Issues Involved: Valuation of captively consumed printed packing materials for cigarettes.Issue Analysis:1. The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner of Central Excise regarding the valuation of captively consumed printed packing materials used in final products, namely, cigarettes.2. The respondent was accused of undervaluing captively consumed goods by not considering the cost of products accurately. The adjudicating authority confirmed the demands raised with interest and penalties, which were later set aside by the first appellate authority.3. The departmental representative argued that the respondent intentionally withheld information regarding expenses, leading to undervaluation. However, the Tribunal found the department's submissions unacceptable for multiple reasons.4. The Tribunal noted that the costing of cigarettes was a disputed issue, but the respondent had prepared costing based on recommendations in the past. The first appellate authority's detailed findings supported the correctness of the valuation adopted by the respondent.5. The first appellate authority concluded that there was no suppression of facts or misstatement by the respondent, especially since the final products were under the physical control of departmental officers. The authority's decision was based on established legal principles.6. Ultimately, the Tribunal upheld the first appellate authority's reasoned order, stating that there was no merit in the Revenue's appeal. The impugned order was upheld, and the appeal was rejected. The cross-objection filed by the respondent was also disposed of accordingly.