2018 (9) TMI 979

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ngaged in manufacture of lagging sheets and are clearing the same to their branches located at various places in the country for carrying out/executing service contracts using such goods; goods are not exclusively used in the servicing but there was also sale of these goods to other customers; assessee paid duty by adopting value on such goods which are used for servicing based on cost of production (+) 15% / 10% as per Rule 8 of the Central Excise (determination of price of excisable goods) valuation rules, 2000. Revenue authorities are of the view that Rule 8 is not applicable to the appellant's case since the said sheets are neither sold nor used for consumption by them or on their behalf in the production or manufacture of other article....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....er basis and appellants have factory gate sale also. It is her submission that the assessee/appellant discharged duty liability following Rule 8 of valuation rules to arrive at assessable value of such lagging sheets cleared to depots /branches on stock transfer basis is incorrect. It is her submission that assessable value has to be arrived at as per Sec.4 of the Central Excise Act, 1944 read with Rule 7 of Valuation Rules which indicates about the assessable value for the depot sales. It is her submission that since there were no normal sales of the said item at the depot, the value should be the price of the goods cleared for sale at the factory gate. It is her further submission that the product which has been cleared to depots/branches....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sues were contested by both sides and one of the issues was regarding valuation of the lagging sheets consumed for executing the contracts for which, the assessee/appellant had cleared the sheets to their branches/depots. We find that the entire issue is in Para (3) of the said order dated 22.03.2005 which we reproduce. "3. The impugned order has confirmed a duty demand of about Rs. 1.46 crores and imposed penalties. Out of this, demand of Rs. 18.54 lakhs has been confirmed in regard to 'lagging sheets' manufactured and cleared for exclusive use in servicing. It is pointed out by the learned Counsel that the assessee had been paying duty (correctly) by treating the cost of production of lagging sheets as the assessable value. The i....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or lagging sheets is required to be determined in terms of CAS-4. In any view of the matter, authorities were not justified in adding cost of servicing and profit arising there from to the value of the goods under assessment. Assessment was of manufactured laggings sheets and not of service. This aspect is required to be reconsidered in terms of CAS-4. We remand this aspect of the matter to the original authority for a fresh decision in terms of CAS-4." (Emphasis supplied) 9. It can be seen from the above reproduced Para that the Bench had clearly accepted that value of lagging sheets cleared to depots/branches is to be determined in terms of CAS-4. It is nobody's case that CAS-4 determination of the value is not in respec....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....aised in the Revenue's appeal is that the appellant buys the conveyor belting in endless length and cuts them to required size and that involves manufacture. This contention of the Revenue is not correct. The conveyor belting is the material used in the construction of conveyors. Like fabrics and other materials, belting comes in endless length and the activity cutting etc. carried out by the appellant cannot be considered as amounting to manufacture. So, no duty is attracted." 2. After hearing the learned counsel for the parties, we are of the opinion that the aforesaid decision of the CESTAT does not call for any interference. Mere cutting of the lengthy conveyor belt into smaller sizes would not amount to manufacture, ipso f....