1999 (9) TMI 299 - AT - Central Excise

Appeal on Exclusion of Bought-Out Items Value in Central Excise Duty Calculation

The Revenue appealed against the exclusion of the value of bought-out items from the final product's value by the Additional Commissioner of Central ... Appeal - New plea Issues:- Exclusion of the value of bought-out items from the final product's value- Calculation of duty on excess value of clearances- Dispute regarding inclusion of bought-out items in total clearance value- Reference to jurisdictional Central Excise Officers for investigationExclusion of the value of bought-out items from the final product's value:The Revenue filed an appeal against the Order of the Additional Commissioner of Central Excise, Calcutta-II, arguing that the value of bought-out items was excluded from the final product's value by the Additional Commissioner. The appellants were manufacturing electrical apparatus and also bringing in certain items from other manufacturers. The Department contended that duty should be calculated on the excess value of clearances after deducting the value of bought-out items. The Department's show cause notice supported this position.Calculation of duty on excess value of clearances:The Department's case in the show cause notice was clear that the value of bought-out items should not be included in the total clearance value. The duty was proposed to be confirmed on the excess clearance value after deducting the value of bought-out items. The Additional Commissioner referred the matter to jurisdictional Central Excise Officers for investigation, and based on their report, confirmed duty on the balance clearance value after considering the small scale exemption notification.Dispute regarding inclusion of bought-out items in total clearance value:The Department consistently intended to deduct the value of bought-out items from the total clearance value of the appellants' factory. The dispute during adjudication centered on the figures of bought-out items, which was resolved based on the Central Excise Officers' report. The Department's appeal went beyond the scope of its original case in the show cause notice, leading to the rejection of the appeal as it lacked merit.Reference to jurisdictional Central Excise Officers for investigation:The Additional Commissioner sought a detailed investigation report from the jurisdictional Central Excise Officers regarding the clearance figures of bought-out items. The report provided clarity on the bought-out items cleared from the factory, which influenced the calculation of duty on the balance clearance value. The Additional Commissioner's decision was based on this investigation report, and the Department's attempt to introduce new grounds in the appeal was deemed unfounded.