2009 (9) TMI 468 - AT - Central Excise

Order- Non-speaking order- Amount received for manufacture of tools amortised. Records indicating duty payment on amortised cost. Order passed without any basis ignoring evidences. Impugned order non-speaking and unreasoned. Matter three years old and impugned order set-aside.

Summary

Issues:
1. Determination of assessable value based on amortized cost of tools.
2. Evidence of duty payment on tools manufactured for a specific entity.
3. Adequacy of evidence considered by lower authorities.
4. Compliance with excise duty requirements.

Issue 1: Determination of assessable value based on amortized cost of tools
The appellant argued that the advance received from L&T was for manufacturing tools to be used only in goods manufactured for L&T, and they informed the Department about the amortization of tool costs for excise duty payment. The appellant contended that the assessable value of goods was determined based on the amortized cost of tools, supported by evidence like invoice No. 2076 dated 30-6-05. The appellant claimed that the Commissioner (Appeals) erred in not considering the evidence and relied solely on AG advice, leading to an unjust adjudication order.

Issue 2: Evidence of duty payment on tools manufactured for a specific entity
The Department argued that there was no evidence to prove that the tools manufactured in 1999-2000 underwent duty payment. They disputed the appellant's claim of amortized cost, stating that no evidence showed the tools were manufactured for L&T. The Department contended that the appellant failed to produce any invoices for the year 1999-2000, questioning the authenticity of the amortized cost plea.

Issue 3: Adequacy of evidence considered by lower authorities
The Tribunal thoroughly examined the documents provided by both parties and found that the appellant had informed the Department about the amortization of tool costs in their reply to the show cause notice. The Tribunal noted that evidence, such as PLA entries showing excise duty payment against amortized costs, was available. The Tribunal criticized the lower authorities for ignoring this evidence and passing an order without a proper basis or examination. The Tribunal found the lower authorities' orders lacking sincerity and reasoning, leading to the decision to set aside the impugned order.

Issue 4: Compliance with excise duty requirements
The Tribunal emphasized the importance of testing the appellant's claims regarding the advance received from L&T and the amortization of tool costs for excise duty payment. The Tribunal highlighted the lack of demonstration by the lower authorities in testing the appellant's submissions, leading to an unsustainable and non-speaking order. Due to the age of the matter and the absence of a reasoned order, the Tribunal allowed the appeal and set aside the impugned order, emphasizing the need for thorough examination and compliance with excise duty regulations.