2018 (6) TMI 911 - AT - Central Excise

Valuation - inclusion of value of the parts and accessories cleared along with machinery in assessable value - Held that - The contention of the appellant is that they have included the value of parts and accessories when such parts are cleared along with machine in set. However when the parts and accessories were cleared as such in that case on the value of such parts the duty is not sustainable. On observation of the above impugned order, the Ld. Commissioner (Appeals) considered that the parts and accessories are cleared along with the machine. There is a contradiction in the finding given by the Ld. Commissioner and the submission made by the appellant in the grounds of appeal. In such a case the facts need to be verified that whether the parts and accessories are cleared along with machine if it is so the value should be included and if the parts and accessories cleared independently then no duty is demandable on such clearances on the parts. Appeal allowed by way of remand.

Summary

Issues Involved:
- Inclusion of value of parts and accessories cleared along with machinery in the assessable value of the machinery.

Analysis:
The main issue in this case was whether the value of parts and accessories cleared along with machinery should be included in the assessable value of the machinery. The appellant argued that a previous order in a similar appeal should be followed for the present case. The Tribunal noted that in the appellant's own case, it was established that when parts and accessories are cleared along with the main machine, their value should be included in the assessable value. However, if these parts and accessories are cleared independently, duty liability does not arise as there is no manufacturing activity involved. The Tribunal set aside the demand related to parts and accessories cleared independently.

Regarding the demand of duty on the amount collected as sales tax but not disputed with the government, the Tribunal upheld that such amount should be included in the assessable value. The Tribunal referred to various case laws to support this decision. The Tribunal differentiated between cases involving excess freight charges and the actual collection of sales tax, stating that any amount collected in excess of the actual sales tax should be part of the assessable value. The demand related to excess sales tax collection was upheld.

The appellant also raised the issue of limitation, arguing that their unit was audited and invoices were submitted with RT-12 Returns. However, it was observed that there was no declaration in the RT-12 return confirming if the amount collected was actually paid to the government. Therefore, the invocation of the extended period was justified, and a penalty was imposed. The Tribunal reduced the quantum of penalty due to the set-aside demand on parts and accessories cleared independently. The appeal was partly allowed with a reduced penalty amount.

In conclusion, the Tribunal found a contradiction between the findings of the Ld. Commissioner and the appellant's submission regarding the clearance of parts and accessories along with machinery. The Tribunal directed the adjudicating authority to verify the facts and pass a fresh order considering the Tribunal's decision in the appellant's own case. The appeal was disposed of by remanding it to the adjudicating authority for further review.