2012 (7) TMI 351 - AT - Central Excise

Assessable value cost of mould - appellants are manufacturing goods for M/s PDAP and the plastic mould and components procured from M/s PPMF. M/s PPMF is paying duty after taking into consideration of the mould amortization cost Held that - Mould amortization cost is not paid by the appellant and the mould amortization cost is directly paid by M/s PDAP and the appellants were clearing the goods to M/s PDAP on payment of duty. While arriving at the assessable value of the goods cleared to M/s DPAP the mould amortization cost is not taken into consideration by appellant - no infirmity in the impugned order - the same is additional consideration flowing to the appellants. - Decided against the assessee.

Summary

Issues:
1. Whether the cost of moulds borne by another company constitutes additional consideration for the appellant?
2. Whether the duty paid by the supplier of input goods covers the mould amortization cost, justifying the appellant's position?

Analysis:
Issue 1: The appellant, engaged in manufacturing Philips brand steam irons, faced a Show Cause Notice alleging suppression of the fact that the cost of moulds used in manufacturing plastic parts was borne by another company. The Tribunal upheld the demand and penalty imposed by the adjudicating authority, as the mould amortization cost was not considered by the appellant in the assessable value of goods supplied to the other company. The Tribunal agreed with the Revenue that the mould amortization cost constituted additional consideration flowing to the appellant, leading to the dismissal of the appeal.

Issue 2: The appellant argued that the supplier of input goods paid duty after considering the mould amortization cost, and since the appellant cleared goods to the other company after paying duty, the demand was not sustainable. However, the Tribunal found that the appellant did not pay the mould amortization cost, which was directly covered by the other company. As the appellant did not include the mould amortization cost in the assessable value of goods supplied, the Tribunal sided with the Revenue's argument that the cost was additional consideration. Consequently, the appeal was dismissed by the Tribunal.

In conclusion, the Tribunal held that the mould amortization cost, borne by the other company and not considered by the appellant in the assessable value of goods supplied, constituted additional consideration. The Tribunal found no merit in the appellant's argument regarding duty payment by the supplier covering the cost, leading to the dismissal of the appeal.