2018 (4) TMI 1028 - AT - Central Excise

Extended period of limitation - Valuation - includibility of amortization of cost of dies/moulds/tools in assessable value - Held that - there were conflicting judgments on the includability of cost of moulds supplied free of costs by the buyers in value of finished goods manufactured using such dies/tooling/moulds. The dispute was finally resolved by the Larger Bench judgment rendered in the case of Mutual Industries Ltd 2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI . This Tribunal in similar set of facts in the case of CCE, Hyderabad vs. ITW Signode 2004 (8) TMI 267 - CESTAT, BANGALORE has taken the view that in such circumstances, the extended period is not invocable. The appeals are remanded back to the Adjudicating Authority to pass a fresh order by applying the normal period of limitation - appeal allowed by way of remand.

Issues:
1. Dispute regarding inclusion of cost of copper engraved printing cylinders in assessable value.
2. Application of penalty under Sec 11AC of the CEA, 1944.
3. Contention on limitation regarding the issue of cost of dies/tooling/moulding charges.
4. Interpretation of conflicting judgments on the issue of amortization of cost of dies/moulds/tools.
5. Invocability of the extended period of limitation.
6. Decision on whether the demands are barred by time.

Analysis:

1. The appeals were filed against the order passed by the Commissioner of Central Excise (Appeals) regarding the inclusion of the cost of copper engraved printing cylinders in the assessable value of goods produced by the appellants. The officers discovered that the appellant had not included designing charges of cylinders and the cost of copper engraved printing cylinders in the assessable value, leading to a demand of ?11,87,402 for the period 1995-96, 1996-97, and 1997-98. The Commissioner (Appeals) upheld the demand and imposed penalties under Sec 11AC of the Act.

2. The issue of penalty under Sec 11AC of the CEA, 1944 was a significant aspect of the case. The penalty was imposed on the appellant company's Director, and the Commissioner (Appeals) directed for a pre-deposit before dismissing the appeals for non-compliance. The Tribunal's final order remanded the case for fresh adjudication, leading to the impugned order by the Commissioner (Appeals) upholding the penalty based on recalculation.

3. The appellant's contention on limitation focused on the issue of cost of dies/tooling/moulding charges. The appellant did not contest the demand on merit but argued on the limitation aspect. They relied on various judgments to support their plea, emphasizing that conflicting views existed until the matter was resolved by a Larger Bench judgment.

4. The Tribunal analyzed conflicting judgments on the issue of amortization of cost of dies/moulds/tools. It was noted that the matter was under dispute, and the extended period of limitation was considered not invocable based on the principle established in previous cases. The Tribunal referred to specific judgments to support its decision.

5. The invocability of the extended period of limitation was a crucial point in the judgment. The Tribunal, following the principle established in previous cases, held that the extended period of limitation was not applicable in the present case. The appeals were remanded back to the Adjudicating Authority for a fresh order applying the normal period of limitation.

6. The decision on whether the demands were barred by time was crucial. The Tribunal, considering the conflicting judgments and the absence of willful suppression of facts to evade duty, concluded that the demands were barred by time and not liable to recovery. The appeals were disposed of by way of remand based on this analysis.

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