Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata granted relief to Indian Steel and Wire Products Ltd on the ground that Goods and Wire Rods have been cleared for payment of duty on value fixed by TISCO.
The Appellant, M/s. Indian Steel & Wire Products Ltd. had entered into an agreement with TISCO for conversion of billets into wire rods for job of basis. After during the course of conversion, certain losses, such as burning losses occurred to the extent of 7%. Accordingly, appellants were required to return 90 tonnes of wire rods after conversion against every 100 tonnes of billets provided by TISCO. Whatsoever, waste arises during the course of conversion was also cleared by the appellant on payment of appropriate duty.
The Revenue has issued Show Cause Notices alleging that the wire rods which were cleared from the premises of the appellants on the prices determined by the TISCO to the customers of the TISCO. However, while clearing they have not accounted for the waste and scrap that was arising during the process of conversion and retained by them. By addition of the value of such waste and scrap cleared by the appellant, the demand has been made.Commissioner dropped the impugned show cause notices against which the Revenue is in appeal.
The Bench consisting of Sanjiv Srivastava, Technical Member and P Dinesha, Judicial Member observed that “Undisputedly in the present case, the goods and wire rods have been cleared for payment of duty on the value fixed by the TISCO for whom appellants have performed the job work. Since the value adopted was the clearance of the goods as fixed by TISCO for the customer of Tisco it would have taken into account all the wastes including the value of waste and scrap retained by the appellants.
All the components going into the value would have thus formed part of the assessable value for such clearances. It is not the case that job work charges have been suppressed to the extent of the value of waste and scrap in the present case as goods have been cleared on actual value fixed by TISCO.”
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