1996 (11) TMI 225 - AT - Central Excise

Tribunal affirms duty on air bags, emphasizes inclusion in assessable value; timing of payment deemed immaterial.

The Tribunal dismissed the appeal, affirming the decision on duty payable on air bags for home consumption and the application of exemption for ... Valuation - Cum-duty price - Deduction for duty Issues involved: Determination of duty payable on air bags for home consumption and applicability of exemption.Issue 1 - Duty payable on air bags for home consumption:The respondent, engaged in manufacturing tyres and air bags, cleared air bags for home consumption without payment of duty, leading to a demand notice for duty payment of Rs. 30,389.25 on assessable value of Rs. 2,02,595.27. The respondent claimed exemption, which was initially rejected by the Additional Collector. However, it was contended that the duty amount should be considered part of the cum-duty price, resulting in a lower duty liability of Rs. 21,610.66 as accepted by the Additional Collector.Issue 2 - Applicability of exemption and determination of assessable value:The Department did not assert that any amount besides the price collected was as excise duty. The Tribunal held that the duty amount calculated on the wholesale price should be considered part of the wholesale price for assessing duty. Citing the Supreme Court's decision in Assistant Collector of Central Excise v. Bata India Limited, it was emphasized that unless the manufacturer demonstrates that the price includes the excise duty payable by them, the duty element cannot be excluded from the price for value determination. In this case, as the duty was payable on the goods and had been paid, the deduction of the duty element for assessable value calculation was deemed justified. The timing of duty payment, whether at clearance or subsequently, was deemed immaterial as long as the excise duty was payable on the goods. The Tribunal affirmed the correctness of the Additional Collector's order in this regard, noting a pending appeal against the penalty imposition by the respondent in another Bench.Conclusion:The appeal was ultimately dismissed by the Tribunal, upholding the decision regarding the duty payable on air bags for home consumption and the application of exemption for determining the assessable value.