2017 (11) TMI 23 - AT - Central Excise

Valuation - amortisation of tooling cost - refund of wrongly added amortization cost - Held that - the original authority while holding that the assessee is eligible for refund of ₹ 173,040/- has observed that the assessee has wrongly paid this duty by oversight by including the value of aforesaid tool cost while debiting the duty for the month of September 2008. The original authority has also got it verified from the jurisdictional Range Officer and confirmed the same and thereafter sanctioned the refund by way of recredit in CENVAT credit account. Whereas the Commissioner(Appeals) in the appeal has totally misconstruing the facts and has raised the issue which was not before the adjudicating authority as there is no dispute with regard to amortisation of the tool cost - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund of erroneously paid duty due to inclusion of tool cost in clearances value.

Analysis:
The appeal was against an order passed by the Commissioner(Appeals) allowing the Department's appeal and setting aside the Order-in-Original passed by the Deputy Commissioner. The case involved the appellant, engaged in manufacturing Roller Tappet Body and Pump Barrel, supplying pump barrels to M/s. Bosch. The appellant manufactured a tool for R.12 lakhs, amortized at the cost of ?60 per piece, and added it to the value of pump barrels. However, while paying duty for September 2008, the appellant erroneously included the tool cost in the clearances value and paid extra duty. The Deputy Commissioner sanctioned a refund of ?1,73,040/-, which the Department appealed against. The Commissioner(Appeals) set aside the refund, leading to the present appeal.

The appellant argued that the impugned order was unsustainable as it failed to appreciate the correct amortization of the tool cost and the duty discharge on the pump barrel value. The Commissioner wrongly raised issues not in dispute, as the refund claim was solely for the duty erroneously paid on the tool cost added to the clearances value. Citing the Supreme Court's decision in CCE Vs. Carrier Aircon Ltd., the appellant contended that the Commissioner exceeded the original proceedings' scope.

The Assistant Commissioner supported the impugned order's findings.

The Judicial Member found that the original authority correctly verified and sanctioned the refund based on evidence that the duty was erroneously paid due to the tool cost inclusion in the clearances value. The Commissioner(Appeals) misconstrued the facts by raising irrelevant issues not disputed, leading to the unsustainable impugned order. Consequently, the Judicial Member allowed the appeal, upholding the original order and granting consequential relief.

In conclusion, the Judicial Member set aside the impugned order, allowed the appellant's appeal, and upheld the original order based on evidence, granting any consequential relief.