2017 (11) TMI 1165 - AT - Central Excise

Liability of duty - Recovery of amortized cost - contention of the main appellant is that they have not recovered the amortized cost from the buyers and it is evident from the invoices issued by them - Held that - the appellant has produced sample invoices before us showing the facts but it is required to be ascertained from the records of the appellant whether they have recovered amortized cost twice from the buyers. For that purpose, by setting aside the impugned order, the matter is remanded back to the adjudicating authority to verify the fact that whether the appellant has recovered the amortized cost twice from the buyers or not? - matter on remand. Penalty on co-appellants - confiscation - pattern/dies for which onetime payment has been made - Held that - no duty is to be demanded on the onetime payment made by the co-appellants on account of pattern and dies which were used captively for manufacturing of castings by the main appellant under N/N. 67/1995 - no penalty is imposable on the co-appellants. Appeal allowed in part and part matter on remand.

Summary

Issues:
Appeal against demand on account of amortized cost and penalties imposed. Verification of recovery of amortized cost by the main appellant. Imposition of penalties on co-appellants.

Analysis:
The appellants contested an order demanding amortized cost from buyers and imposing penalties. The main appellant, engaged in manufacturing castings, required pattern/dies for production. Allegations arose that the appellant charged buyers twice for pattern/dies, recovering costs through one-time payments and including amortized cost in assessable value on invoices. The show cause notice sought duty payment on one-time payments for pattern/dies, proposing confiscation and penalties. The adjudication determined duty payable on amortized cost but exempted the main appellant under Notification No. 67/1995. Penalties were imposed on co-appellants. The tribunal noted discrepancies in proposals for confiscation and duty demands, leading to setting aside penalties on co-appellants.

Regarding the main appellant's recovery of amortized cost, they denied double recovery from buyers, presenting invoices as evidence. The tribunal remanded the matter to verify if amortized costs were indeed recovered twice. The adjudicating authority was directed to ascertain the facts, determining duty liability accordingly. The main appellant was given the opportunity to support their claims with relevant documents. The impugned order was set aside, and the matter remanded for verification, with penalties on co-appellants overturned. The appeals were disposed of accordingly.