Commr. of Central Excise Vs. Diamond TIn Works - Court Judgment

Excerpt:
1. this is an appeal filed by the department against the decision of the collector of customs and central excise (appeals), mumbai, wherein he had not added the value of the p.p. caps to the value of the container for arriving at the assessable value of the container under the central excise act.2. it is the argument of the department that was revealed in the grounds of appeal is that the agreement between the purchasers itself was to produce the container p.p. caps and the consideration has been passed on between the parties. it was contended by the assessee before the original authority, viz. the assistant collector that they had purchased p.p. caps required by the customer and supplied them direct to the customers. the p.p. caps, it was further contended by the assessee, were not in their factory, but sent directly to the customers from the place of its manufacture. the contentions of the assessee was rejected by the assessing officer on the ground that the party was maintaining sales and purchase register from which it was observed that p.p. caps brought to the factory and set to h.p.c.l. and therefore, party's contention to supply to m/s. h.p.c.l. is the trading activity could not be accepted and, therefore, the assessing authority i.e.assistant collector confirmed the show cause notice. against that order an appeal was filed before the collector (appeals) who held that the finit containers are removed without fitted with p.p. caps. it was not necessary for the appellants to bring p.p. caps inside the factory premises to fit on the containers. the p.p. caps are used only after the containers are filled with buyers product i.e. finit. the containers with p.p. caps are assessed as complete containers. it was further held by the collector that p.p. caps are classified under different heading. therefore, he agreed with the contentions raised by the respondent in the appeals and allowed the appeal. the present appeal is against the decision of the collector (appeals).3. it is contended by shri kumar id. dr that the agreement between the parties is for the supply of the container with p.p. caps. the facts as found by the assistant collector would reveal clearly that the p.p.caps have been brought to the assessee's factory and the container with the p.p. caps viz. finit along with p.p. caps have been sent to the purchaser's premises. therefore, the entire product viz. the container with the p.p. caps have to be taken for consideration of the valuation purpose.4. we have considered the arguments of shri kumar in the absence of the respondent.5. the grounds of appeal do not state specifically that the value of p.p. caps should be included for purpose of valuation as the agreement between purchaser and the seller has been in a consolidated sum viz.the agreement between the purchaser with seller contains the total value of the container and p.p. caps. it is not stated specifically by the govt. in the grounds of appeal. therefore, this argument of shri kumar cannot be accepted. the other argument made in the grounds of appeal is that the contract is for the supply of finit containers with p.p. caps. they have maintained purchase and sales records in an elaborate way including the value of p.p. caps. therefore, the value of p.p. caps should be considered for the purpose of valuation. in our view the excise duty is not for the purpose of maintaining registers.it is charged on the manufacture of goods. therefore, the argument of department cannot be accepted.6. appeal is, therefore, dismissed confirming the order of the collector (appeals).

Judgment:
1. This is an appeal filed by the Department against the decision of the Collector of Customs and Central Excise (Appeals), Mumbai, wherein he had not added the value of the P.P. Caps to the value of the container for arriving at the assessable value of the container under the Central Excise Act.

2. It is the argument of the department that was revealed in the grounds of appeal is that the agreement between the purchasers itself was to produce the container P.P. Caps and the consideration has been passed on between the parties. It was contended by the assessee before the original authority, viz. the Assistant Collector that they had purchased P.P. Caps required by the customer and supplied them direct to the customers. The P.P. Caps, it was further contended by the assessee, were not in their factory, but sent directly to the customers from the place of its manufacture. The contentions of the assessee was rejected by the Assessing Officer on the ground that the party was maintaining sales and purchase register from which it was observed that P.P. Caps brought to the factory and set to H.P.C.L. and therefore, party's contention to supply to M/s. H.P.C.L. is the trading activity could not be accepted and, therefore, the assessing authority i.e.

Assistant Collector confirmed the Show Cause Notice. Against that order an appeal was filed before the Collector (Appeals) who held that the FINIT Containers are removed without fitted with P.P. Caps. It was not necessary for the appellants to bring P.P. Caps inside the factory premises to fit on the containers. The P.P. Caps are used only after the containers are filled with buyers product i.e. FINIT. The containers with P.P. Caps are assessed as complete containers. It was further held by the Collector that P.P. Caps are classified under different heading. Therefore, he agreed with the contentions raised by the respondent in the appeals and allowed the appeal. The present appeal is against the decision of the Collector (Appeals).

3. It is contended by Shri Kumar Id. DR that the agreement between the parties is for the supply of the container with P.P. Caps. The facts as found by the Assistant Collector would reveal clearly that the P.P.Caps have been brought to the assessee's factory and the container with the P.P. Caps viz. FINIT along with P.P. Caps have been sent to the purchaser's premises. Therefore, the entire product viz. the container with the P.P. Caps have to be taken for consideration of the valuation purpose.

4. We have considered the arguments of Shri Kumar in the absence of the respondent.

5. The grounds of appeal do not state specifically that the value of P.P. Caps should be included for purpose of valuation as the agreement between purchaser and the seller has been in a consolidated sum viz.

the agreement between the purchaser with seller contains the total value of the container and P.P. Caps. It is not stated specifically by the Govt. in the grounds of appeal. Therefore, this argument of Shri Kumar cannot be accepted. The other argument made in the grounds of appeal is that the contract is for the supply of FINIT containers with P.P. Caps. They have maintained purchase and sales records in an elaborate way including the value of P.P. Caps. Therefore, the value of P.P. Caps should be considered for the purpose of valuation. In our view the excise duty is not for the purpose of maintaining registers.

It is charged on the manufacture of goods. Therefore, the argument of department cannot be accepted.

6. Appeal is, therefore, dismissed confirming the order of the Collector (Appeals).