2024-VIL-1622-CESTAT-ALH-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Job work, Valuation, Exemption notification – Appellant was engaged in the manufacture of Wire Harness, Automobile and wire Harness Electrical, on job work basis – Excise duty was being paid on the value of the final product by adding/using their own inputs, but the value of inputs supplied free of cost by the manufacturer were not being included for paying central excise duty - Whether the value of free supply material from the prime manufacturer should have been included in the assessable value for payment of central excise duty by the job worker - HELD - as per the decisions of the Supreme Court in Ujagar Prints and Pawan Biscuits, the value of raw material supplied for job work should have been added to arrive at the assessable value. The provisions of Section 2(h) of the Central Excise Act, 1944 and Rule 6 & Rule 10A of the Valuation Rules, 2000 require the value of free supply material to be included in the assessable value, irrespective of the admissibility of CENVAT credit to the job worker in respect of such free supply material – Further, the appellant had suppressed the value of the goods cleared by not including the value of the free supply material from the prime manufacturer, with an intent to evade payment of central excise duty. Therefore, the extended period of limitation under Section 11A(4) was rightly invoked - the suppression of material facts with an intent to evade payment of duty justified the imposition of penalty under Section 11AC – the appeal is dismissed
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