M/S. Sound Tracks vs Commissioner Of Central Excise, Mumbai

[Arising out of Order-in- Original No. 26/2004 dtd. 23/11/2004 passed by the Commissioner of Central Excise Mumbai-IV]

For approval and signature:

Honble Mr. P.K. Jain, Member(Technical) Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities?

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M/s. Sound Tracks : Appellants

VS

Commissioner of Central Excise, Mumbai : Respondent

Appearance

Shri. Manish Thakar, Partner for the Appellants Shri. V.K. Shastri, Asst. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. P.K. Jain, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 17/3/2015 Date of decision: 17/3/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Original No. 26/2004 dtd. 23/11/2004 passed by the Commissioner of Central Excise Mumbai-IV, wherein Ld. Commissioner confirmed the demand of Excise duty amounting Rs. 1,00,408/- for the period 07/5/1997 to 27/5/1998. A penalty of Rs. 1,00,408/- under Section 11AC of Central Excise Act, 1944 and interest under Section 11AB was also confirmed. The fact of the case is that the appellant is engaged in the manufacture of Recorded Audio Cassettes falling under Chapter Sub-Heading no. 8524.32 of the CETA, 1985. On inquiry by the Preventive Officer and on checking of statutory records viz. invoice book, delivery challans etc. it was revealed that the basic raw material i.e. Pancakes (Magnetic Tapes), Plastic Bodies without magnetic tapes and inlay covers (I.C. Plastic covers) were purchased by the appellant directly from the supplier. The original sound track i.e. master copy of the program and inlay cards were supplied by the various music companies for whom the appellant manufactured and supplied audio cassettes. In the show cause notice it was contended that the transaction/sale between appellants and individual music company was not at arms length and hence cannot be considered as sale on principal to principal basis.

It was alleged that the price at which the appellant is selling the goods to the music companies was not acceptable price under Section 4 of the Central Excise Act, 1944. The wholesale price at which these goods were sold by the music company to their dealers should be taken as assessable value, which includes cost of program royalty, payment to the artist and studio charges and other incidental charges. In the adjudication order dated 11/2/2003, the adjudicating authority confirmed demand of Rs. 1,00,408/- and also imposed penalty and interest. Aggrieved by the said order the appellant filed appeal before the this Tribunal which was disposed of vide order No. C-II/594/WZB/04/Mumbai dated 23/2/2004 wherein this Tribunal have upheld the order on merit but remanded matter to the adjudicating authority for re-working of duty and penalty particularly for the reason that cost of pancake, magnetic tape has to be amortization of the number of copies of existing tapes. In the denovo adjudication vide adjudication order dated 23/11/2004 the Commissioner has once again confirmed the demand of the said amount i.e. Rs. 1,00,408/- penalty and interest under Section 11AC and 11AB respectively of Central Excise Act, 1944 were imposed.

Aggrieved by the said order the appellant is before us.

2. Shri. Manish Thakar, Partner of the appellant firm appeared and reiterates the grounds of appeals.

3. Shri. V.K. Shastri, Ld. Asst. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that as regard issue on merit it has already been decided by this Tribunal by for the earlier final order No. C-II/594/WZB/04/Mumbai dated 23/2/2004. Vide the said order this Tribunal had remanded the matter to the adjudicating authority only for the limited purpose that cost of pancake master tape has to be amortized. The appellant has not challenged the said Tribunal order on merit. Hence the same attains finality. In view of this, he submits that now at this stage the appellant cannot have any grievances.

4. We have carefully considered the submissions made by both the sides and perused the records.

5. We find that in the earlier proceedings in the very same case, this Tribunal has settled the valuation issue against the assessee, however the matter was remanded only for limited purpose of addition of amortization cost of pancake master tape. We find that in the denovo adjudication Ld. Commissioner has recorded in para 23 of the impugned order which is reproduced below:

I find from the worksheet attached to and the Order-in-Original No. 2/2003 dt. 14/2/2003 that the cost of the Pancake mater tape had been amortized over the number of copies of the audio cassette tapes. As the duty was worked out after amortizing the cost of master cassettes pancake over the number of cassette tapes made, the duty already worked out in the Order-in-original does not call for any further interference. The assessee in the personal hearing has not challenged the above fact. A copy of the worksheet was made available to the assessee before passing the Order. The assessee did not raise nay question regarding their having paid more duty than was due. The assessee appears to be under the impression that assessable value of audio Cassette tapes after including all elements should be Rs. 14.75 per cassette. The departments stand all along is that elements like value of inlay cards, Jewel boxes, royalty, master cassette tape etc., were including in the value of the tapes. All other issues except the question as to whether the cost of Pancake master tape was amortized or not have been finally settled by the Tribunal. The order-in-Original therefore already passed, does not require any interference.

From the findings it is clear that direction given by the Tribunal has already been taken care therefore there is no need for any further addition on account of ammortisation in the value adopted by the Revenue therefore there was no need of re-working of excise duty which was already worked out and confirmed in the earlier order hence the same confirmation made in the impugned order is absolutely in order and does not require any interference. Since first order of the Tribunal was not challenged by the appellant, at this stage the appellant cannot raise any grievance. In view of the above position we are of the considered view that the impugned order by the Ld. Commissioner is just, proper and legal and no infirmity found therein. Hence the impugned order is upheld, the appeal is dismissed.

(Operative part pronounced in court)

P.K. Jain Member (Technical) Ramesh Nair Member (Judicial) sk

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