Tribunal excludes coating value from metalized film assessment, citing duty payment pre-coating.

The Tribunal ruled in favor of the appellant, holding that the value of coating should not be included in the assessable value of the metalized polyester film. The Tribunal distinguished the case from a Supreme Court precedent, emphasizing that duty was already paid on the metalized film before coating, and the coating process did not amount to manufacture. As a result, the impugned order was set aside, and the appeal was allowed with any consequential relief.

---

---

Issues:
Inclusion of the value of coating in the assessable value of metalized polyester film.

Analysis:
The appellant, engaged in manufacturing Polyester Film, metalizes the film and sells it in the market after paying duty. Some metalized films are sent to a coating unit for further coating without paying duty on the coating value. The Revenue contends that the value of the coating should be included in the assessable value based on a Supreme Court decision. A show cause notice was issued, demanding differential duty and imposing penalties. The appellant challenges this, arguing that the coating activity does not amount to manufacture, and as duty was paid on the metalized film, no additional duty is owed for the coating. They distinguish their case from the Supreme Court precedent involving galvanization of black pipe. The appellant maintains that the coating process is separate and not subject to duty. The Revenue, however, supports the initial decision.

The Tribunal notes the distinction between this case and the Supreme Court precedent, where duty was not paid on the black pipe sent for galvanization. In this instance, duty was paid on the metalized film before coating. As coating does not constitute manufacture and duty was already paid on the film, the Tribunal concludes that the value of the coating should not be added to the assessable value. Consequently, the impugned order is set aside, and the appeal is allowed with any consequential relief.

In conclusion, the Tribunal rules in favor of the appellant, finding no merit in the Revenue's position to include the value of coating in the assessable value of the metalized polyester film. The decision is based on the distinction between the current case and the precedent cited, emphasizing that the duty was already paid on the metalized film, making additional duty for the coating unnecessary.

---