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2009 (3) TMI 753 - AT - Central Excise
Issues: Challenge to duty paid on manufactured goods, duty calculation for spare parts supplied to sister concern, applicability of CAS 4, interpretation of Board's Circular on value determination.
Analysis: 1. Duty on Manufactured Goods: The department challenged the duty paid on manufactured goods, alleging that the respondents did not add 15% to the cost of manufacture to determine the assessable value. The respondents initially calculated the transfer price based on old practices, including profit, and paid duty accordingly. However, the Board clarified later that the cost should be calculated as per CAS 4. The respondents recalculated the duty liability as per CAS 4, resulting in additional duty payment. The Tribunal noted that the duty paid by the respondents was in order, considering the application of CAS 4, and dismissed the department's appeal. 2. Duty on Spare Parts: Regarding the duty on spare parts supplied to the sister concern, the department contended that duty should be paid by adding 15% to the invoice value. However, the respondents argued that the Board's Circular allowed the adoption of the incoming invoice value for such parts. The Tribunal found the respondents' practice in line with the Circular and stated that no further demand on them was sustainable. The department's appeal on this issue was also dismissed. 3. Cross Objection: The respondents filed a Cross Objection seeking a refund of the balance amount. However, during the hearing, the respondents' advocate mentioned that they were not pressing for the refund of the differential duty paid. Consequently, the Cross Objection was dismissed as not pressed. In conclusion, the Tribunal upheld the respondents' duty calculations based on CAS 4 for manufactured goods and supported their practice regarding spare parts in accordance with the Board's Circular. The department's appeal was dismissed on both issues, and the Cross Objection for a refund was not pursued by the respondents during the hearing.
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