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TMI Blog2018 (6) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the casting even in cases, where such patterns are being supplied by the buyers of the casting or are got prepared/manufactured by the job workers at the cost of the buyer. The issue of apportionment of the cost of moulds and dies, where the use of moulds and dies is spread over long period was dealt by this Tribunal in the case of Flex Industries Ltd. [1997 (1) TMI 173 - CEGAT, NEW DELHI], wherein this Tribunal after considering the aforesaid Board’s Circular dt. 23.01.1996 has held that the conclusion arrived at by the lower authorities that entire value of the cylinders is to be added to the value of printed pouches manufactured during the relevant period without reference to the expected life and capability of the cylinders has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otor vehicle parts but duty was not paid on tools cost received from their customers when the tools manufactured in house were to be used by the appellants for the manufacture of motor vehicle parts. It was seen from the purchase orders that the appellants had manufactured tools for M/s Fiat India Automobiles Ltd. and used the same captively for which they received a sum of ₹ 80,44,500/- as tooling cost. M/s Fiat India Automobiles has mentioned in their purchase agreement dt. 20.03.1999 that they would pay tooling cost to the appellants and maintenance of the tools would also be the responsibility of the appellants. As it was not mentioned in the said purchase orders that the tooling cost/charges would be included in the assessable va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellants went in appeal before Commissioner (Appeals). The first appellate authority upheld the order of adjudicating authority and rejected the appeal filed by the appellants. Aggrieved from the same, the appellants have filed this appeal. 3. Ld. Advocate for the appellants invites attention to para 6 7 of the Order-in-Appeal and contends that there is an error in the order of Commissioner (Appeals) wherein he has held that the appellants should have amortized the entire cost of tools by taking into account the ordered quantity of the goods, which were manufactured with the help of said tools and supplied to their buyer instead of adopting the formula of calculating the tooling cost per unit based on the life span of the tools ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where it was laid down as below: 3. The matter has been examined and it is hereby clarified that the proportionate cost of pattern has to be included in the assessable value of the casting even in cases, where such patterns are being supplied by the buyers of the casting or are got prepared/manufactured by the job workers at the cost of the buyer. In cases, where there is difficulty in apportioning the cost of pattern, apportionment can be made depending on the expected life and capability of the pattern and the quantity of castings that can be manufactured from it and thus working the cost to be apportioned per unit. For this purpose, a certificate from a Cost Accountant, may be accepted. 6.2 We find that the issue of apportion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod. If so, it has to be regarded that Rs. (x 10 Lakhs) x 4 Lakhs is the proportionate value of cylinder utilized in the manufacture of finished products during the period and only this value can be added to the value of printed pouches. This rational principle of proportional value addition has been approved by the Board and we are of the opinion that Board was right in doing so. This has to be arrived at after making a realistic estimate of the expected life and capability of the cylinders and determining the appropriate proportion of the value of cylinders to be added to the value of printed pouches. The conclusion arrived at by the lower authorities that entire value of the cylinders is to be added to the value of printed pouches manu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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