9911796707
TMI Blog2018 (3) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... three cost areas disputed by the appellant - appeal allowed by way of remand. - E/501/2009 - A/43395/2017 - Dated:- 20-12-2017 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri S. Ramasubramanian, Advocate - for the Appellant Shri R. Subramanian, AC (AR) - for the Respondent ORDER Per: Bench The facts of the case are that M/s. Kone Elevators India Pvt. Ltd., the appellants herein, are engaged in manufacture, supply, installation and commissioning of elevators and escalators. The appellant had adopted provisional assessment as cost of production of the components that go into lifts and escalators cannot be accurately determined since some of them are manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have seen that between the field and factory, the apportionment made is in the ratio of 75 : 25 in respect of other over heads. However, within the factory, the appellants have other call centers viz. Managing director, HR, Finance, Taxation, Purchase, M1 Centre etc. and therefore allocation of the entire proportion of factory expenses to production is unwarranted. The respondent ought to have taken 25% of the expenses allocated to the factory as per CAS-4 being ₹ 5,55,696/- to production activity for arriving at the amount payable. At this juncture, it would not be out of place to point out that the appellants have taken service tax credit wherever they are eligible. The respondent erred in reckoning the accounts to the cost of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same on any legal principles. 2.6 Ld. Counsel also submitted a chart summarizing the details of allocation of overheads in respect of the three disputed area, as per the department and as per the own working, which is as follows :- GL Description As per trial balance Allocation in accordance Allocation by department A B C D E 0610 Power 77,12,580 34,94,083 73,55,964 0611 Diesel 37,73,476 17,02,781 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 0740 M1 Centre - 24,000 - - 0749 Product Development 5,000 - - - 0749 Production 6,500 - - - 0749 Quality 48,300 - - - 0749 Purchase 15,077 - - - 0749 Systems 4,70,633 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have other call centres like Managing Director, HR, Finance, Taxation, Purchase, M1 Centre etc. and therefore allocation of the entire proportion of factory expenses to production is unwarranted. 5.2 So also in respect of consultancy and professional charges, the lower appellate authority has held that charges relating to technical consultancy has to be charged to production and this becomes production overhead item; that legal consultancy charges, filing of appeals, writ petitions also have relevance to production and has upheld the original authority's order on this score. However, the appellant's contention is that as per CAS 4, only those administrative heads relating to production activity alone could get benefit in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even before the adjudicating authority do not appear to have given cognizance or otherwise analyzed and rejected with reasoning. This being so, we are of the considered opinion that the interest of justice would be served by remanding the matter to the original authority for denovo consideration in respect of these three cost areas disputed by the appellant, after taking into account the contentions raised by them above and in particular causing due cognizance and analysis of the evidence that they have already submitted in earlier proceedings. Appellant should also be allowed to produce any additional evidence in support of their stand. Needless to say, in such denovo adjudication, the appellant should be given a due opportunity of person ..... X X X X Extracts X X X X X X X X Extracts X X X X
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