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2010 (8) TMI 797 - AT - Central ExciseValuation - the amortized value of moulds and dies supplied free of cost by the buyer is liable to be included in the assessable value of the final products manufactured by making use of such moulds and dies or not? - time limitation - Held that - the appellant deliberately excluded the amortized cost of moulds (supplied free of cost by Telco) from the assessable value of the excisable goods supplied to Telco (buyer) - this conduct of the appellant was wilful with intent to evade payment of appropriate duty on the goods in question - the extended period cannot be resisted by the appellants on the premise that whatever duty paid by them would ultimately be available as Modvat/Cenvat credit to the buyer - the demand of duty for the period from 1997-98 to 31-1-99 is not hit by time-bar and that the demand of duty for the prior period is time-barred. The amount of interest on duty u/s 11AB and amount of penalty u/s 11AC require to be re-quantified by the original authority - appeal allowed by way of remand.
Issues:
Challenge against demand of duty, interest, and penalty for the period from March 1994 to January 1999 based on the inclusion of amortized value of moulds and dies supplied free of cost by the buyer in the assessable value of final products; Challenge against demand of duty solely on the ground of limitation. Analysis: Issue 1: Challenge against demand of duty, interest, and penalty - The appeal challenges the demand of duty, interest under Section 11AB, and penalty under Section 11AC for the period from March 1994 to January 1999. - The appellant initially challenged the demand of duty both on merits and on the ground of limitation. However, the appellant withdrew the challenge on merits due to the settled legal position that the amortized value of moulds and dies supplied free of cost by the buyer is to be included in the assessable value of final products. - The show cause notice alleged suppression of facts by the appellant to evade duty, leading to the invocation of the extended period of limitation. - The original authority confirmed the demand of duty, interest, and penalty. The Commissioner (Appeals) upheld the decision, leading to the present appeal. - The appellant argued that there was confusion regarding the inclusion of the value of moulds and dies in the assessable value of goods due to conflicting decisions of the Tribunal, citing cases such as Mutual Industries Ltd., Bright Brothers Ltd., and Star Glass Works. - The appellant contended that there was no intention to evade duty, emphasizing the concept of 'revenue neutrality' as the duty paid would be available as Modvat credit to the buyer. - The ld. SDR opposed the appellant's arguments, stating that the appellant continued to exclude the amortized cost of moulds from the assessable value even after a Tribunal decision favored inclusion. - The Tribunal found that the appellant deliberately excluded the amortized cost of moulds from the assessable value, indicating an intent to evade payment of appropriate duty. - The Tribunal held that the demand of duty for the period from 1997-98 to 31-1-99 was not time-barred, while the demand for the prior period was time-barred. - The matter was remanded to the original authority for re-quantification of interest and penalty. Issue 2: Challenge against demand of duty solely on the ground of limitation - The appellant's challenge against the demand of duty was solely based on the ground of limitation. - The appellant argued that there was no suppression of facts with intent to evade duty, citing confusion due to conflicting Tribunal decisions. - The ld. SDR contended that the appellant deliberately excluded the amortized cost of moulds from the assessable value even after a Tribunal decision favored inclusion, indicating suppression of relevant facts. - The Tribunal held that the demand of duty for the prior period was time-barred, but for the period from 1997-98 to 31-1-99, the demand was not time-barred. - The Tribunal remanded the matter to the original authority for re-quantification of interest and penalty. This detailed analysis covers the issues involved in the legal judgment, addressing the challenge against the demand of duty, interest, and penalty, as well as the challenge against the demand of duty solely on the ground of limitation.
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