2017 (10) TMI 1298 - AT - Central Excise

Valuation - inclusion of chassis in the goods cleared by SML - Rule 10A of the Central Excise valuation Rules - Held that - the identical issue came up before this Tribunal in the case of Audi Automobiles V. CCE 2009 (5) TMI 426 - CESTAT, NEW DELHI wherein it has been held that the assessee is liable to pay duty in terms of Rule 10A of the Rules i.e. on the value at which the principal manufacturer cleared the goods on payment of duty, therefore, the differential duty is confirmed along with interest. Extended period of limitation - Held that - in the case of Audi Automobiles itself, this Tribunal observed that the appellant cannot be accused of my suppression documents - extended period of limitation - penalties not imposable. Demand of duty within the period of limitation is confirmed along with interest - appeal allowed in part.

Summary

Issues:
1. Valuation of goods for duty payment under Rule 10A of the Central Excise Valuation Rules.
2. Applicability of extended period of limitation for demand of duty.
3. Imposition of penalty on the appellant.

Valuation of Goods for Duty Payment:
The appellant, engaged in fabrication of body chassis supplied by M/s Swaraj Mazda Limited (SML), received chassis and paid duty under section 4 of the Central Excise Act, 1944. The issue arose when the appellant was required to pay duty for the whole body built, inclusive of the valuation of the chassis in goods cleared by SML. Proceedings were initiated under Rule 10A of the Central Excise Valuation Rules, resulting in a demand for differential duty, interest, and penalties. The Tribunal referred to a similar case precedent and confirmed the differential duty based on the value at which the principal manufacturer cleared the goods, upholding the demand along with interest.

Applicability of Extended Period of Limitation:
The appellant disputed the invocation of the extended period of limitation and imposition of penalties, arguing that the issue of duty payment under Rule 10A was in dispute and had been settled in a previous Tribunal case. The Tribunal noted that the appellant could not be accused of suppressing documents and held that the extended period was not invokable. Consequently, demands related to the extended period were set aside. Since there was no mala-fide intention and the issue pertained to valuation, the Tribunal ruled that penalties were not imposable on the appellant.

Imposition of Penalty:
Given the findings on the extended period of limitation and lack of mala-fide intention, the Tribunal determined that penalties were not warranted in this case. Therefore, the penalties were deemed not imposable on the appellant. The order confirmed the demand of duty within the period of limitation along with interest, while setting aside the penalties. The appeals were disposed of accordingly.