E-Mox Device Company Vs Commissioner of GST & Central Excise (CESTAT Chennai)
In the case of E-Mox Device Company Vs Commissioner of GST & Central Excise, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, allowed the appeal filed by E-Mox Device Company and held that valuation of blow moulded HDPE plastic bottle caps manufactured on job work basis could not be determined under Rule 8 of the Central Excise Valuation Rules by adopting 110% of the cost of production.
The appellant was engaged in manufacturing HDPE plastic bottle caps for Marico Limited on job work basis using inputs supplied by the principal manufacturer. The appellant paid excise duty by determining assessable value based on material cost plus conversion charges, supported by quarterly cost certificates issued by a Chartered Accountant.
The department took the view that since the caps were used by Marico in further manufacture, valuation should be done under Rule 10A(iii) read with Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 by adopting 110% of the cost of production. A show cause notice was issued demanding differential duty for the period from November 2015 to June 2017 along with interest and penalty. The Adjudicating Authority confirmed the demand with interest and imposed penalty. On appeal, the Commissioner (Appeals) dropped the penalty but upheld the duty demand and interest.
