2017 (9) TMI 1657 - AT - Central Excise

Charges recovered from the customers non added to assessable value - Valuation - Penalty imposed - Held that - he issue no more res integra and stands settled by the larger bench of the Tribunal in the case of Mutual Industries Ltd. vs. CCE Mumbai (2000 (3) TMI 74 - CEGAT COURT NO. I NEW DELHI). Inasmuch as in the present case the appellant has not been able to show us any evidence to reflect upon the fact that any additional amount was recovered from the customer brought to the notice of the Revenue the imposition of penalty is justifiable - appeal dismissed - decided against appellant.

Summary

Issues:
1. Whether charges recovered from customers for tools and dies should be added to the assessable value of the final products.
2. Imposition of penalty for non-disclosure of recovered charges.

Analysis:
1. The appellant, engaged in manufacturing rough forgings and motor vehicle parts, recovered the cost of tools and dies from customers without disclosing these charges to the Revenue. The Revenue contended that these charges should be added to the assessable value of the final products. The Tribunal referred to the decision in Mutual Industries Ltd. vs. CCE, Mumbai, and Prayas Castings Ld. Vs. CCE, Ahmedabad, where it was held that such charges are includible in the assessable value. The Tribunal found no evidence presented by the appellant to dispute the charges, leading to upholding the demand of Rs. 80,784 along with interest and penalty.

2. The Tribunal noted that the appellant failed to demonstrate any evidence to refute the recovery of additional charges from customers. Citing the precedent set by the larger bench decision and the imposition of penalty in similar cases, the Tribunal upheld the penalty imposed in the present case. The Tribunal emphasized that non-disclosure of recovered charges amounted to suppression with intent to evade duty payment, justifying the imposition of penalty. The penalty amount was reduced in certain cases based on the circumstances, but overall, the penalty was upheld due to the lack of evidence presented by the appellant.

In conclusion, the Tribunal upheld the impugned order, confirming the demand for inclusion of charges in the assessable value of final products and the imposition of penalty due to non-disclosure of recovered charges. The appeal was rejected based on the findings and legal precedents cited during the proceedings.