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TMI Blog2003 (8) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... on visit by the officers, it was found that the appellants did not include amortized cost of moulds which were supplied by the customers free of cost, in the assessable value of EPS. In the circumstances show cause notice was issued to the appellants which culminated in the order of adjudication passed by the Additional Commissioner demanding duty and imposing penalty against which the appellants filed appeal before the lower appellate authority and the lower appellate authority modified the order of the original authority as noted above. 3. Aggrieved by the order of the lower appellate authority, appellants have filed Appeal No. E/1146/01. In the grounds of appeal they have inter alia stated that the finding of the Commissioner (Appeals) in para 6 to the effect that the appellants had not intimated to the department the fact of receipt of moulds free of cost, and hence there was suppression of fact, hence extended period has been correctly invoked, is not correct. Appellants contended that this view of the Commissioner (Appeals) was not correct as the Central Excise Act/Rules do not contain any provision nor have they prescribed any procedure of communicating aspects of the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessable value of the goods,.has differed with the amount of differential duty demandable on the basis that the costs of moulds should be spread over the total number of pieces that could be possibly made by such moulds and not by the number actually removed. This reasoning of the Commissioner may not be valid because the total number of pieces able to be manufactured from a mould may only be a hypothetical question of engineering which in this context may be irrelevant when we are dealing with facts and evidences whereas the number actually subjected to manufacture from a mould should be taken into consideration for amortization. It is also not the case of the assessee that he has actually used these customer specific moulds to make more number of pieces than that supplied to the respective customers and produced evidence to that effect and hence a blind guess of the assessee been accepted by the Commissioner (Appeals) without any discussion. 6. Shri P. Davaludu, learned JDR appearing for the department reiterated the grounds of appeal and prayed for setting aside the order-in-appeal and rejection of the appeal filed by the assessee and allowing the Revenue appeal. He has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of the maximum estimated number of finished product (moulded components), the mould continue to be of value as far as manufacture of moulded components is concerned. Therefore, the value of the mould should be enlarged as to the number of moulded components that could be made out of such mould and not the number of moulded components (finished product) actually manufactured and removed. Para 8 of the judgement is reproduced below for convenience of reference. 8. Learned Counsel representing the appellant advanced a further argument in the following terms. According to him, the maximum number of times during which the mould could be used has been found to be 2,50,000. When the same mould is used for the manufacture of components above. 2,50,000 no value on account of the user of the mould can be added to the value of the finished product. In other words, according to learned Counsel, once the mould is utilised in the manufacture of maximum number of units, the mould becomes valueless and cannot thereafter go in to increase the value of the produce for the assessment of excise duty. We are not in a position to agree with this contention of the learned Counsel. Even a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment that the appellants have not maintained various statutory records, or have not supplied the terms of the contract with their customers for manufacture of moulded components (EPS) or that they have not supplied the price list or the classification list to the department. The officers of the department responsible for approving the classification list and price list must have been made aware of the terms of the contract for supply of the free moulds and manufacture of EPS out of such moulds. As held by the Larger Bench in the cited judgement (supra), the department ought to have noticed the fact regarding supply of moulds free of cost at the time of approving the classification list/price list. If the officers of the department failed to do so at the relevant time, the department cannot accuse the appellants of holding back information from the department on a subsequent date at their convenience. The appellants have also taken the plea that they were not aware of the rule position, that they were required to add the cost of mould to the assessable value of EPS. Therefore, in the facts and circumstances of the case, mens rea is not established in this case and intent to eva ..... X X X X Extracts X X X X X X X X Extracts X X X X
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