2015 (5) TMI 203 - AT - Central Excise

Invocation of extended period of limitation - Valuation of goods - Revenue contends that supply of moulds free of cost by M/s. Whirlpool India Ltd is additional consideration and amortization cost of the moulds is to be added for arriving the assessable value of the finished product - Held that - Period involved is from Aug-1998 to Jun 1999. As pointed out by the Ld. A.R. during Aug 1998, the Tribunal decision in the case of Flex Inds. Ltd V/s. CCE, Meerut (1997 (1) TMI 173 - CEGAT, NEW DELHI) was holding the field and appellant was not following the same. Conflicting decision came later on. It is also noted that in Jun 1999, appellant themselves have deposited the duty on 1/7/99, 5/7/1999, 6/7/1999. It is not disputed that non-inclusion of the cost of amortization was not disclosed to the department and therefore this vital fact was suppressed. The appellant have subscribed in the invoice to fake declaration that price is the sole consideration for sale and no other consideration in any form is flowing back to them. Under the circumstances, in our view extended period is correctly invoked and demand is correctly confirmed. Interest will also be chargeable under Section 11AB. - Decided against Assessee.

Summary

Issues:
1. Assessment of assessable value based on cost construction method.
2. Invoking extended period of limitation for demand.
3. Suppression of facts and mis-declaration by the appellant.

Assessment of assessable value based on cost construction method:
The case involved the appellant manufacturing parts for M/s. Whirlpool India Ltd., receiving raw materials and moulds from them, and clearing the finished parts on payment of duty. The appellant adopted the cost construction method for assessing the value, considering raw materials and job charges. An investigation was initiated by Revenue due to the free supply of moulds by M/s. Whirlpool India Ltd., leading to a demand for additional amortization cost of the moulds in the assessable value. The Tribunal noted conflicting decisions but upheld the demand, stating that the appellant suppressed the non-inclusion of amortization cost, leading to the correct invocation of the extended period and confirmation of the demand.

Invoking extended period of limitation for demand:
The appellant contended that conflicting decisions existed before the show cause notice was issued, challenging the invocation of the extended period of limitation. However, the Revenue argued that during the relevant period, the Tribunal's decision in a specific case required the inclusion of amortization cost, which the appellant failed to comply with. The Tribunal found that the appellant deposited duty after the investigation and suppressed the vital fact of non-inclusion of amortization cost, justifying the correct invocation of the extended period and confirming the demand along with interest under Section 11AB.

Suppression of facts and mis-declaration by the appellant:
The Tribunal emphasized that the appellant did not disclose the non-inclusion of amortization cost to the department, leading to a suppression of vital facts. The appellant's declaration in the invoice that price was the sole consideration for sale was deemed fake, as other considerations were involved. Consequently, the Tribunal dismissed the appeal, confirming the demand and stating that interest would be chargeable under Section 11AB due to the appellant's actions.