2018 (6) TMI 1290 - AT - Central Excise

Invocation of extended period of limitation - issue was of interpretation - Held that - The learned Commissioner have erred in observing that there was neither any ambiguity nor the situation is fluid as regards inclusion of the cost/price of moulds/dies etc., in the final product. Under the facts and circumstances, the issue was only of interpretation and there were conflicting views taken by this Tribunal - the SCN is bad for invocation of extended period of limitation - appeal allowed - decided in favor of appellant.

Issues:
1. Invocation of extended period of limitation in a show cause notice for inclusion of printing cylinders cost in assessable value.
2. Interpretation of inclusion of amortised cost of moulds and dies in assessable value for plastic components manufacturing.
3. Applicability of Circular No. 170/4/96 - CX dated 23 January, 1996 on calculation of assessable value of castings with supplied patterns/moulds.
4. Conflict in earlier tribunal decisions regarding inclusion of cost of moulds/dies in assessable value.
5. Whether the show cause notice is barred by limitation.

Analysis:
1. The appeal addressed the issue of invoking the extended period of limitation in a show cause notice concerning the inclusion of printing cylinders cost in the assessable value. The Tribunal had previously remanded the case for quantification of demand and penalty, upholding the extended period of limitation. However, subsequent appeals and orders by the Supreme Court and Commissioner led to a final appeal where the Tribunal decided in favor of the Revenue. The appellant contended that the issue was no longer res-integra based on a similar case involving Mutual Industries Ltd, arguing that the show cause notice was barred by limitation.

2. The case involved the interpretation of including the amortised cost of moulds and dies in the assessable value for manufacturing plastic components. The Larger Bench of the Tribunal in the Mutual Industries case concluded that the additional consideration towards moulds/dies should be included in the assessable value. The appellant argued that the issue was debatable, citing Circular No. 170/4/96 - CX dated 23 January, 1996, and previous conflicting tribunal decisions. The Tribunal found that the issue was a matter of interpretation with conflicting views, leading to the allowance of the appeal and setting aside the impugned order.

3. Circular No. 170/4/96 - CX dated 23 January, 1996 was referenced to clarify the calculation of assessable value of castings with supplied patterns/moulds. The circular stated that the proportionate cost of patterns/moulds should be included in the assessable value, even if supplied by buyers, with apportionment based on expected life and quantity of castings. The appellant argued that the case fell within the Larger Bench ruling of the Tribunal in Mutual Industries Ltd, seeking relief based on the circular's guidelines.

4. The conflicting views in earlier tribunal decisions regarding the inclusion of cost of moulds/dies in the assessable value were highlighted. The appellant referenced Mutual Industries Ltd case to support their argument that the issue was debatable, indicating no contumacious conduct or concealment. The Tribunal acknowledged the conflicting views and pending matter before the Larger Bench, leading to the decision that the show cause notice was bad for invoking the extended period of limitation.

5. The central issue revolved around whether the show cause notice was barred by limitation. The Tribunal found that the matter was a question of interpretation with conflicting views, making the show cause notice invalid for invoking the extended period of limitation. The appellant was granted consequential benefits in accordance with the law, and the impugned order was set aside based on the limitation issue.

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