Appeal allowed, excess insurance premium not includible in assessable value, demand barred by limitation.

The appeal was allowed, setting aside the impugned order. The Tribunal found that the excess insurance premium collected was not includible in the assessable value and that the demand was barred by limitation.

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Issues Involved:
1. Demand of Central Excise Duty
2. Recovery of Interest
3. Imposition of Penalty
4. Inclusion of Insurance Premium in Assessable Value
5. Bar of Limitation

Summary:

1. Demand of Central Excise Duty:
The appeal was directed against the Order-in-Appeal which upheld the demand of Rs. 61,628/- under Section 11A(1) of the Central Excise Act, 1944. The appellant was found to have collected insurance premiums from customers exceeding the actual premiums paid to the insurance company.

2. Recovery of Interest:
The Commissioner (Appeals) ordered the recovery of interest at the appropriate rate under Section 11AB of the Central Excise Act, 1944, from the appellant.

3. Imposition of Penalty:
A penalty of Rs. 61,628/- was imposed under Section 11AC of the Central Excise Act, 1944, on the appellant.

4. Inclusion of Insurance Premium in Assessable Value:
The appellant argued that the excess insurance premium collected should not be included in the assessable value as it pertains to non-manufacturing activity. The Tribunal referred to several decisions, including Baroda Electric Meters Ltd. [1997 (94) ELT 13 (SC)], which held that such profits on non-manufacturing activities could not be included in the assessable value. The Tribunal found that the Revenue did not provide evidence that the transaction between the job worker and the merchant manufacturer was not at arm's length or that job charges were suppressed. The excess insurance premium collected was not to be included in the assessable value, following the decisions in U.P. Twiga Fiberglass Ltd. [2015 (316) ELT 304 (Tri.-Del.)] and Marpol Pvt. Ltd. [2017-TIOL-567-CESTAT-MUM].

5. Bar of Limitation:
The appellant contended that the demand was barred by limitation as there was no suppression of facts. The Tribunal found merit in this argument, noting that the Revenue did not dispute the job charges recovered by the appellant or provide evidence of suppression.

Conclusion:
The appeal was allowed, setting aside the impugned order. The Tribunal found that the excess insurance premium collected was not includible in the assessable value and that the demand was barred by limitation.

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