2019 (4) TMI 1070 - AT - Central Excise

Valuation - inclusion of amortised cost of the designs and drawings in assessable value - HELD THAT - The issue was decided by the Tribunal in COMMISSIONER OF CENTRAL EXCISE JAMSHEDPUR VERSUS TATA MOTORS 2008 (12) TMI 129 - CESTAT KOLKATA , where it was held that the cost of drawings and designs is includible in the assessable value of the components - the demand falling within normal time limit upheld - penalties set aside. The Original Authority is directed to re-quantify the demand - appeal allowed in part.

Summary

Issues:
- Whether the appellant is required to pay duty on the value of components manufactured by including the amortised cost of designs and drawings provided by the customer?
- Whether the demand for differential duty, interest, and penalties upheld by the Original Authority and the First Appellate Authority is justified?
- Whether the Tribunal's decision in a similar case is applicable to the present appeal?
- Whether penalties imposed on the appellant are justified?

Analysis:
The appeal pertains to the demand for differential duty, interest, and penalties raised by the department against the appellant, engaged in manufacturing Motor Vehicle Parts and Accessories supplied with designs and drawings by the customer, M/s Tata Motors Ltd. The department contended that the appellant should pay duty by including the amortised cost of the designs and drawings provided by the customer. The Original Authority and the First Appellate Authority upheld the demand, leading to the present appeal challenging these orders. The Tribunal considered a similar issue in a previous case and held that the cost of designs and drawings should be included in the assessable value of components for the normal period of limitation. The Tribunal set aside the penalties and directed the Original Authority to re-determine the additional duty and interest within the normal period. Consequently, the present appeal was partly allowed, upholding the demand within the normal time limit and setting aside the penalties imposed on the appellant.

In conclusion, the Tribunal's decision in a similar case was applied to the present appeal, leading to the demand for additional duty being upheld within the normal time limit. The penalties imposed on the appellant were set aside, and the matter was remanded to the Original Authority for re-quantification of the demand. The appellant was granted credit for the additional duty paid by them, and penalties were not justified in this case. The appeal was partly allowed, emphasizing the importance of following the legal provisions and limitations in duty assessments.