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TMI Blog2017 (7) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is the total cost of the die which is to be amortised. Accordingly, the amortisation cost of modification charges of the dies has to be included in the assessable value of the goods manufactured with the help of such die/tools. Hence the amortisation of modification charges of die is required to be included in the assessable value. Extended period of limitation - penalty - Held that: - there was no means for ascertaining that the appellants have collected die modification charges in respect of those dies/tools which are used for manufacture of excisable goods of the appellants. In this fact there is a clear suppression of fact on the part of the appellants. Therefore the extended period was legally and correctly invoked by the adjudicating authority. For the same reason the penalty imposed under Section 11AC is also sustainable. Appeal dismissed - decided against appelalnt. - E/85646/16 - A/88275/17/EB - Dated:- 10-7-2017 - Shri Ramesh Nair, Member ( Judicial ) And Shri Raju, Member ( Technical ) Shri S.A. Gundecha, Advocate for the appellant Shri Ajay Kumar, Jt. Commissioner (AR) for the respondent ORDER Per: Ramesh Nair The appellants are e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the excisable goods of the appellants. He submits that the amortised cost of the dies is already included in the value of the excisable goods manufactured out of such die. Therefore the cost of modification of die need not be included in the assessable value. In support he placed reliance on the following judgment:- CCE Belgaum Vs. Mysore Kirloskar Ltd. - 2008 (226) ELT 161(SC) CCE Vs. Special Steel Ltd. - 2016 (334) ELT A123 (SC) 4. He further submits that the demand is time barred as there is no suppression of fact on the part of the appellants. The appellant's books have been regularly audited in February 2009 to June 2012, July 2012 to July 2013 and April 2010 to March 2013. Therefore all the records related to the receipt of service charges towards die modification was reflected in the books of accounts. Accordingly, the extended period should not have been invoked. He further submits that the entire case is of revenue neutrality for the reason that the entire goods manufactured out of the modified die supplied to Volkswagen India as original equipment which is further used in the manufacture of motor vehicles. The customer Volkswagen India is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the fact of the case, there is no dispute that the appellants have carried out the service activity of modification of die which was provided by their customer, Volkswagen India. Against the said modification service, the appellants have collected the service charge along with service tax. The said modified die/ tools were used in the manufacture of parts of motor vehicle which was subsequently sold to Volkswagen India. The amortisation cost of unmodified die/ tools has already been included in the value of the parts of motor vehicle manufactured by the appellants. As regards the cost of modification, in our view it is nothing but addition of the cost in the value of overall die/ tools which is used for the manufacture. In this regard, the statutory provision is provided in Rule 6 of Central Excise Valuation Rules 2000 which read as under:- Rule 6. - Where the excisable goods are sold in the circumstances specified in clause (a) of sub section (1) of section 4 of the Act except the circumstance where the price is not the sole consideration for sale, the value of such goods shall be deemed to be the aggregate of such transaction value and the amount of money value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in lowering of the prices. Thus, no notional interest on the advance received shall be added to the transaction value. From the above rule, it can be seen that the amortisation cost of die/tools/ moulds has to be included in the assessable value of the excisable goods manufactured out of such tools/die/mould supplied free of cost by the customer even though it does not make any difference whether the appellants have carried out the modification. Even if the modification is carried out by someone else, the value of modification will enhance the value of the tools/dies. When such modified tools/dies used by the manufacturer the said enhanced value shall be considered for taking the cost of the tools/die for purpose of amortisation. Therefore whether it is the original cost of the die or enhanced cost due to addition of modification charges it is one and the same and the cost of the die should be taken as the original cost of the die plus modification charges. That is the total cost of the die which is to be amortised. Accordingly, we are of the view that the amortisation cost of modification charges of the dies has to be included in the assessable value of the goods manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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