Srinivasa Enterprises Vs Commissioner of Customs & Central Excise (CESTAT Hyderabad)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad, heard an appeal filed against an Order-in-Original dated 17.07.2014 confirming Central Excise duty by including, in the assessable value of glued joints, the value of rails supplied free of cost by Indian Railways for manufacture of those goods.
The dispute was confined to a single issue. The Adjudicating Authority had confirmed the duty demand on the ground that, during the relevant period from 17.03.2012 to 03.02.2014, no exemption was available permitting exclusion of the value of rails supplied free of cost by Indian Railways from the assessable value of glued joints.
The appellant manufactured glued joints classifiable under Chapter Heading 8530 of the Central Excise Tariff Act, 1985. Under contracts awarded by Indian Railways, the Railways supplied rails free of cost to the appellant, who manufactured glued joints using those rails and supplied the finished goods back to the Railways. Proceedings were initiated alleging that the value of the free-supplied rails should be included in the assessable value of the glued joints, resulting in a demand of duty along with interest and penalties. The Adjudicating Authority confirmed the demand because no specific exemption existed during the relevant period.
