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TMI Blog2023 (4) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... Feb., 2019, which has attained finality. Accordingly, this appeal is allowed and the impugned order is modified to the effect that 0.025% shall be considered on the value of the goods towards drawing and design charges for the purpose of valuation in terms of Rule 6 of the Valuation Rules. The appellant shall be liable to pay penalty under section 11 AC of the amount of additional duty calculated as per this order. The impugned order stands modified. Appeal allowed. - Excise Appeal No.50047 of 2020 (DB) - FINAL ORDER NO.50455/2023 - Dated:- 11-4-2023 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Ms. Priyanka Rathi, Advocate for the appellant. Shri O.P. Bisht, Authorised Representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments, if any, as per law. 3. Pursuant to remand, the appellant/assessee filed written submissions along with Chartered Engineer s certificate dated 17th May, 2017 and inter alia submitted that the cost of such designs and drawings after amortization shall be zero, as the designs are of repeated nature and given to many vendors, by the buyers. In the alternative, as per the Chartered Engineer s certificate, the maximum value of drawings can be taken as 0.025% of the total value of the goods. It was also urged that the appellant is charging depreciation on the amortized value and accordingly, such cost is already considered in the price of the goods sold. 4. The Appellant also relied on the precedent judgements in the case of CIT Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs have not been repeatedly used by the noticee/appellant. 6. The ld. Commissioner also called for a report from the Range Assistant Commissioner, who had vide letter dated 3rd July, 2017 submitted the verification report as under: (a) The goods manufactured by the noticee are machinery and machinery parts, which are mainly custom made engineering goods, as per specified drawings and cannot be the goods of general use. (b) The same drawing has not been repeatedly used by the noticee, so as to justify the amortization of the value. (c ) There was additional flow of consideration in the shape of money value i.e. the cost of drawing and design supplied by their customers. (d) During enquiry and investigation conducted at M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case for the subsequent period July, 2010 to June, 2017, wherein the show cause notice was adjudicated vide Order-in-Appeal dated 28th Feb., 2019. The Additional Commissioner in the said order observed that the said report in the case of Pratibha Flowcon Engg. Pvt. Ltd., Bhilai was not supported by any tangible documentary evidence regarding the flow of money, indicating additional consideration. It is settled law that the burden to prove the flow of additional consideration, direct or indirect with regard to cost of drawing to the noticee from its customers, is on the Revenue. As alleged in the case, if drawings/design are provided by the customers, the Department could have gathered its value during investigation at the consignee/buyer s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dispute was in the matter, where drawing and design were supplied by the customer. Revenue had contended that the value for drawing/design shall be 10%, whereas assessee contended that the cost will be not more than 0.1% of the value of the goods, relying on the Chartered Engineer s certificate. The Tribunal held that adoption of 10% towards drawing and design was arbitrary unreasonable and without any basis. It was also observed that rejection of 0.1% of the value towards drawing/design, as per Chartered Engineer s certificate was without any basis. The Additional Commissioner further observed that the Chartered Engineer is a technical competent person, who has given the report/quotation after examining and studying the affairs of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.025% towards value of drawings and designs, under same facts and circumstances, for the subsequent period vide the order-in-original dated 28th Feb., 2019, which has attained finality. Accordingly, we allow this appeal and modify the impugned order to the effect that 0.025% shall be considered on the value of the goods towards drawing and design charges for the purpose of valuation in terms of Rule 6 of the Valuation Rules. The appellant shall be liable to pay penalty under section 11 AC of the amount of additional duty calculated as per this order. The impugned order stands modified. 12. With the aforementioned observations and directions, the appeal is allowed. [Order pronounced on 11.04.2023] - - TaxTMI - TMITax - Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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