2007 (3) TMI 640 - AT - Central Excise

Summary

Issues:
The issues involved in the judgment are the imposition of additional charges by a manufacturer for dies and development, the assessment of these charges in the assessable value, and the applicability of Circular No. 170/4/96-CX.

Imposition of Additional Charges:
The appellant, a manufacturer of castings, was found to be collecting amounts in the name of die and development charges over and above the amount charged on the excisable goods. The department considered this extra amount as additional consideration directly linked to the product sold by the appellant. The department discovered this practice during an inquiry, leading to the imposition of a sum of Rs. 77,760/- to be recovered along with an equal penalty. Both the original authority and the Commissioner (Appeals) upheld this decision.

Assessment of Charges in Assessable Value:
It was established that the dies used in manufacturing the castings were owned by the appellant, and amounts representing die and development charges were recovered for each clearance. Even in cases where the dies are owned by buyers and provided to the manufacturer, Circular No. 170/4/96-CX states that the apportioned cost of such dies should be added to the assessable value. The adjudicating authority and the Commissioner (Appeals) relied on this circular to support their decision. No valid grounds were presented to challenge the Commissioner (Appeals)' findings.

Applicability of Circular No. 170/4/96-CX:
The judgment highlighted the relevance of Circular No. 170/4/96-CX, which clarifies the inclusion of die costs in the assessable value based on factors like expected life, capability of the pattern, and quantity of castings. The authorities in this case used this circular to justify their decision, emphasizing the importance of considering die and development charges in the overall valuation process.

In conclusion, the appeal was dismissed based on the findings and reasoning presented in the judgment, ultimately upholding the imposition of additional charges by the manufacturer and the inclusion of die and development charges in the assessable value as per Circular No. 170/4/96-CX.