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2020 (3) TMI 833 - AT - Central ExciseValuation - includibility - whether such tools supplied free of cost by M/s Tata Motors Ltd. would get included in the cost of parts on proportionate basis? - HELD THAT - Larger Bench decision of the Tribunal in the case of MUTUAL INDUSTRIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, MUMBAI 2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI where it was held that Proposition that such inclusion need not be made when after successive income tax depreciation cost of the moulds become zero, not acceptable. Time Limitation - HELD THAT - The appellant being manufacturer of motor vehicles part, the cost of the tools has to be included in the assessable value of the parts. As such, there are no infirmity in the invocation of the longer period of limitation. Appeal dismissed - decided against appellant.
Issues:
1. Inclusion of tools supplied free of cost in the cost of parts on a proportionate basis. 2. Confirmation of demand of duty. 3. Challenge on the point of limitation. Analysis: Issue 1: Inclusion of tools in the cost of parts The appellant, engaged in manufacturing parts of motor vehicles, received tools from M/s Tata Motors for use in production. The question was whether these tools should be included in the cost of parts on a proportionate basis. The Tribunal referred to a previous decision where it was held that the cost of tools supplied free by the customer should be included in the assessable value of finished goods. The Tribunal also cited a Supreme Court decision supporting this principle. Consequently, the issue was decided against the assessee on merits. Issue 2: Confirmation of demand of duty The Lower Authorities confirmed a duty demand of around &8377;6.30 lakhs. The demand was based on the inclusion of the cost of tools supplied by M/s Tata Motors in the assessable value of parts. The appellant challenged this demand on the point of limitation, arguing that the issue was raised after a significant delay. However, the Lower Authorities found the appellant guilty of suppression for not disclosing the receipt of free supplies, justifying the longer period of limitation. The Tribunal upheld the demand, considering the appellant's awareness of the legal requirement to include tool costs in the assessable value. Issue 3: Challenge on the point of limitation The appellant contested the demand's timing, stating it was raised long after the relevant period. However, the Tribunal found the appellant at fault for not disclosing the receipt of free supplies, leading to the invocation of the longer limitation period. The Tribunal emphasized that the appellant, being in the business of manufacturing motor vehicle parts, should have been aware of the legal obligation to include tool costs in the assessable value. Consequently, the challenge on the point of limitation was dismissed, and the appeal was rejected. This judgment highlights the importance of timely disclosure and compliance with legal requirements in the context of excise valuation and duty demands. The decision underscores the principle that costs of tools supplied free of charge should be included in the assessable value of finished goods, and failure to disclose such information can lead to adverse consequences, including the invocation of longer limitation periods.
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