9911796707
TMI Blog2024 (6) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench decision in Mutual Industries Ltd Vs Commissioner of Central Excise, Mumbai [ 2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI ], where it was held that ' had the mould not been supplied by the customer, appellant could not have agreed to the price of the finished goods at the price as is evidenced by the contract entered into between them. So, the price of the finished goods fixed in the contract between the parties can safely be taken as not the sole consideration for the sale of the finished product.' The fact whether the tools were manufactured in the appellants factory or was outsourced by the appellant from another company would not change the legal position as per CVR 2000 so long as they were paid for by the buyer-customer - The tools manufactured and used for production of components at the cost of the buyer and against purchase orders, needs to be included in the cost of production and amortized for payment of duty on the final products manufactured by the appellant using such tools. Double taxation - HELD THAT:- Double taxation with reference to central excise duties on goods means levying central excise taxes twice on the very same excisable product, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the buyers against purchase orders. The appellant had collected the cost of tools from the buyer-customers by raising excise invoices but the value of the same were neither included in the cost of production nor amortized for payment of duty on the final products manufactured by using such tools. After due process of law the learned Adjudicating Authority confirmed the demand for duty in terms of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (CVR 2000)read with the proviso to Section 11A(1) of the Central Excise Act 1944, (C. Ex. Act) along with interest and equal penalty under Section 11AC of the C. Ex. Act, as shown in the Table below. TABLE Sl. No. Invoice No. Date Supplier Name Description Value of tools in Rs. Duty Demanded in Rs. 1 8507/24.12.07 Cooper, Foundry, Satara Tools 2,00,000 32,960 2 9065/08.01.08 Cooper, Foundry, Satara Tools 1,10,000 18,128 3 566/25.04.08 Wapco TVS Tools 25,000 3,605 4 8966/28.03.09 Mahindra Mahindra Tools 60,00,000 4,94,400 5 6461/08.12.08 Tata Motors Tools 15,00,000 1,54,500 6 7388/10.11.09 Ashok Leyland Tools 10,00,000 82,400 Total 88,35,000 7,85,993 Aggrieved by the order of the Additional Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-CX, dated 23/1/96 issued from file No. 6/14/94-CX.I wherein it was stated that the proportionate cost of pattern has to be included in the assessable value of the casting in cases when such patterns are being supplied by the buyers of the casting or are got prepared / manufactured by the job worker at the cost of the buyer. He has also taken us through this Tribunal s Final order No.40389/2023 dated 31/05/2023, in the case of M/s Best Cast IT Ltd Vs Commissioner of GST Central Excise, (where one of us was a Member of the Bench) and stated that since an identical issue was decided by the said order in favour of Revenue, the appeal may be rejected. 4. The issue relating to invoice 1, 2, 3 and 4 as to whether the cost of tools supplied by the buyer free of charge back to the appellant, should be included as an amortised cost, when the said tools are used in the appellants factory for manufacture of components for the said buyers, in terms of Rule 6 of CVR 2000 or not, has been examined by this Tribunal in M/s Best Cast IT Ltd (supra) after considering the judgements of Commissioner of Central Excise, Mumbai I Vs Mega Rubber Technologies Pvt Ltd [2016 (343) ELT 384 (Tri-Mum)] and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract entered into between them. So, the price of the finished goods fixed in the contract between the parties can safely be taken as not the sole consideration for the sale of the finished product. The other consideration is the value attributable to the use of the mould. In this view of the matter, we are not in a position to agree with the conclusions arrived at by West Zonal Bench, Mumbai in the three decisions referred to earlier. With respect we approve the decision rendered by this Tribunal in Flex Industries Ltd. case (supra). The fact whether the tools were manufactured in the appellants factory or was outsourced by the appellant from another company would not change the legal position as per CVR 2000 so long as they were paid for by the buyer-customer. The tools manufactured and used for production of components at the cost of the buyer and against purchase orders, needs to be included in the cost of production and amortized for payment of duty on the final products manufactured by the appellant using such tools. 5. Double taxation with reference to central excise duties on goods means levying central excise taxes twice on the very same excisable product, which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is understood as an accounting method for spreading out the costs of an asset over the expected period the said asset will provide value. Amortizing the value of tools viz., jigs and fixtures, molds and dies will include amortizing its total monetary value (i.e. both of the tools manufactured and services rendered to the buyer for the manufacture of the tools). The cost incurred by the buyer in such cases would have to form part of the amortised cost of the final product (less the duty exemption eligible on the tools). The issue of double taxation is not a valid argument as has been discussed above. 7.1 The final issue is whether the extended time limit could have been invoked in this case. We find that the requirement of law is that mere failure or negligence in adopting the correct value and making the correct payment of duty cannot be considered as suppression of fact with intention to evade payment of duty, especially when the issue was complex. Something more is required to show that there was a positive intention to evade payment of duty. We do not find any such reason or finding in the impugned order. We hence do not find grounds to invoke the extended period and the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
