UNIQUE ERECTORS (GUJARAT) PVT. LTD. Vs. CCE

JUDGEMENT

(1.) IN this appeal filed by M/s. Unique Erectors (Gujarat) Pvt. Ltd., the matter relates to the inclusion of the cost of the Boiler Quality (BO) Steel Plates supplied by the Customers, Indian Oil Corporation Ltd. (M/s. IOC), free of charge, in the assessable value of Liquefied Petroleum Gas (LPG) Storage Tank Bullets. In the show cause notice dated 3.9.1985, it was alleged that various elements in the correct determination of assessable value of LPG Storage Tank Bullets had not been taken into account by the appellants and that by suppression of facts central excise duty of Rs. 7,80,778.10 had been evaded. In reply, the appellants had submitted that a number of additions to their declared value as proposed in the show cause notice were not liable to be added. The Collector of Central Excise, Ahmedabad, who adjudicated the matter observed that the cost of the Steel Plates which had been utilised for the purpose of fabrication of the bullets according to the contract with M/s. IOC under strict Quality Control and specifications, was to be included in the assessable value of the bullets manufactured by the assessee. He however, agreed that the cost on account of providing suitable reinforced cement concrete foundation, the inspection charges, transportation charges and the installation charges were not required to be included. He however, confirmed the allegations that there was suppression of facts and held that the extended period of limitation was correctly invokable for confirming the demand. He confirmed a demand of Rs. 35,361.45 as against the demand of Rs. 780778.10 as proposed in the show cause notice. The matter was heard on 26.10.1998 when Shri V.B. Joshi, Advocate submitted that the show cause notice was issued on 3.9.1985 demanding duty for the period 1982 -83 and 1983 -84. There was no suppression of facts by the assessee. He referred to the Tribunal's decision in the appellant's own case in Appeal No. E/1013/89 -A wherein under final order No. 775/97 -A dated 28.4.1997 (1997 (71) ECR 510 (T)) the Tribunal had restricted the demand to the normal period of limitation.

(2.) IN reply Shri K. Shiv Kumar, JDR submitted that in the price lists filed by the assessee there was no mention that the cost of raw materials had not been included in the value of their final products. It was a clear case of suppression. As regards the merits of the case, he submitted that the position was well settled that the cost of raw material was includible in the assessable value of the goods manufactured. As regards, the Tribunal's decision in Appeal No. E/1013/89 -A (1997 (71) ECR 510 (T)), he submitted that the facts were entirely different and in that case as observed by the Tribunal, there was no reference to mis -declaration or suppression of the cost of fittings which were the subject matter of that appeal. In the present appeal, it is not the fittings but the B.Q. Steel Plates, whose value has been mis -declared by the appellants.

(3.) WE have carefully considered the matter. According to Section 4(4)(d) of the Central Excises and Salt Act, 1944, the value in relation to any excisable goods, where the goods are delivered at the time of removal in a packed condition includes the cost of such packing except the cost of the packing which is of a durable nature and is returnable by the buyer to the assessee. The cost of the packing will include the excise duty if so leviable on such goods. While arriving at the assessable value of the finished products, the cost of the raw materials/packings had to be taken into account. The Hon'ble Supreme Court in the case of Kirloskar Brothers Ltd. v. UOI, 1992 (59) ELT 3 (SC) :, 1992 (39) ECR 177 (SC) had observed that while determining the assessable value of the pump, excise duty already paid on electric motor was to be taken into account. They had observed that the value of the excise duty paid on electric motor was not deductible while arriving at the assessable value under Section 4 of the Act. In the case of Mahendra Mills Ltd. v. UOI, 1988 (36) ELT 563 (Gujarat) :, 1989 (23) ECR 123 (Gujarat), it has been held that the excise duty payable on manufactured yarn was includible in the manufacturing cost of the fabrics.