1999 (10) TMI 361 - AT - Central Excise

Summary

Issues: Valuation of aluminium extrusions for Central Excise duty including tooling charges/part die cost.

Analysis:
The case involves a dispute regarding the valuation of aluminium extrusions manufactured for specific buyers, where the appellants charge 'tooling charges/part die cost' for cutting special dies required for manufacturing extrusions exclusive to certain customers. The central issue is whether these additional charges should be included in the assessable value of the extrusions for Central Excise duty assessment.

The appellants argued against the addition of part die cost, stating that not all cases involve collecting such charges, identical extrusions are sold to other buyers without these charges, the dies are duty-classifiable, can be used for several years, and refunds are provided for excess quantities supplied. However, the tribunal emphasized that under Section 4(1)(a) of the Central Excise Act, if any additional consideration is part of the transaction, it must be added to determine the full consideration for the goods sold.

Referring to Rule 5 of the Central Excise Valuation Rules, the tribunal noted that when goods are sold with additional considerations beyond the price, the value should include both the price and the money value of the extra consideration. Since the tooling charges were collected for exclusive extrusions, considered additional to the agreed price, they had to be added to the value of the extrusions. The argument that identical goods were sold without these charges or that dies are dutiable was dismissed as irrelevant to the valuation process.

The appellants' claim that determining a specific amount for part die cost per ton of extrusion was impractical was rejected. The tribunal clarified that apportioning such costs was a matter of accounting principles and should not exclude the additional consideration from the assessable value. Consequently, the tribunal concluded that the tooling charges/part die cost should be included in the assessable value of the extrusions, leading to the dismissal of the appeal.

In summary, the tribunal held that the tooling charges/part die cost collected by the appellants for manufacturing exclusive extrusions should be added to the assessable value of the extrusions for Central Excise duty assessment, as per the provisions of the Central Excise Act and Valuation Rules. The tribunal rejected the appellants' arguments against including these charges, emphasizing the need to consider all additional considerations in determining the full value of the goods sold.