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TMI Blog2018 (1) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... - Whatever is the No. of pieces manufactured the amount involved is the cost that is ₹ 100000/- on which excise duty is paid and the quantity produced is irrelevant. Appeal dismissed. - Appeal No. E/71/2011 - Final Order No.43212/2017 - Dated:- 18-12-2017 - Ms. Sulekha Beevi C.S. Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri A.R.Sreenivasan, Consultant For the Appellant Shri P.Ambuchelvan, Supdt.(AR) For the Respondent ORDER Per Bench Brief facts are that appellants are engaged in manufacture of CNC Lathes, CNC Machining Centre and Iron Castings. They are registered with the Central Excise Department. Appellants received patterns free of cost from their customers to whom they supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. To comply with this requirement, the appellant had included the entire amortized cost of the pattern for the clearances of 75 pieces. The appellant or the supplier was not able to conclude as to how much castings can be or has to be made using the patterns. So the appellant amortized the cost of the pattern against the quantity of castings supplied against the first Purchase Order. That the law only requires the cost of the pattern/mould supplied free should be included in the assessable value. The assessee therefore can amortize the entire cost of the pattern on even one piece manufactured and supply the balance castings without adding the amortization cost. The amortization was done on the basis of the cost of the pattern mentioned i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no question of short payment of excise duty. 3. The Ld.AR Shri P.Ambuchelvan reiterated the findings in the impugned order. He submitted that, appellants had selectively included the amortized value of the pattern in respect of clearances of certain quantities of castings. The appellants have to include the amortized cost of the pattern on entire clearances manufactured using the pattern since, the pattern used for manufacture of finished product still has value even after manufacture of 75 castings. The Commissioner (Appeals) has rightly relied upon the decision in the case of Mutual Industries Ltd (supra) which is on identical issue. That the impugned order is correct and proper. 4. Heard both sides. 5. As per Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mould Therefore Amortization cost = --------------------------------------- Total number of castings manufactured. i.e. ₹ 1,00,000/- = ₹ 100 per piece 1000 pieces ... Excise duty payable is 16% on ₹ 100/- and for 1000 pieces it works out to ₹ 16,000/- Case 2 a) Total cost of mould ₹ 1,00,000 (say) b) Total Number of casting manufactured 5000 pieces (say) Total cost of the moulds Amortization cost = ----------------------------- Total number of casting manufactured. i.e. ₹ 1,00,000/- = ₹ 20 per piece 5000 pieces Therefore Excise duty is payable on 5,000 pieces at ₹ 20/- each i.e. ₹ 1,00,000/- which works out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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