9911796707
TMI Blog2025 (2) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ols' to the job worker without amortizing the cost of the same. However, in Appellant's case, adjudication authority admits that the original equipment manufacturers (OEMs) being the customers of the Appellant have amortized the cost of the mould supplied by them and hence the above judgment cannot be applied to the facts of the present case. As regarding the reliance on the decisions of the Larger Bench in the matter of M/s. Mutual Industries Ltd. Vs. Collector of Central Excise, Mumbai [2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI], the movement of mould were neither undertaken under the job work challan nor the job worker amortize the value of the free issue material. However, in the present case, movement of mould from OEMs to the appellant was under job work challan and further the value of the mould in the present case is amortized, while clearing the final product, which includes the intermediate product manufactured and supplied by the appellant. The impugned order confirming the demand along with the interest and imposition of penalty is unsustainable. Conclusion - The intermediate product manufacturers are not liable for duty on free supply inputs when the final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Auto Ltd. Vs. CC, Kanpur-2005 (183) E.L.T 239 (SC). 5. The Ld. Counsel draws our attention to Paragraph 34 of the impugned order, where the Adjudication authority held that; "the automobile manufacturers invest substantial amount for getting the mould prepared and the moulds so prepared are made available to the intermediate manufacturer under job works challans for the manufacturer of moulded automobile parts. As per the blanket purchase agreement of the automobile manufacturer, I find that the price of the goods to be supplied by the intermediate manufacturer includes the amortized cost of the mould. The intermediate manufacturer in turn places an order with the assessee for the manufacture of moulded automobile trims and send the mould to assessee under job works challan issued under Rule 4(5)(b) of CENVAT credit Rules. I find that the purchase orders of the intermediate manufacturers do not include amortized cost of the mould to the price of the goods". 6. The Ld. Counsel draws our attention to the finding given by the Adjudicating authority related to the applicability of judgment of the Hon'ble Supreme Court in the matter of M/s. International Auto and held that the party c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur attention to the chart to demonstrate that it is a Revenue neutral situation. At the Tier-II, the Appellant is manufacturing the goods, and the moulds are supplied by the Tier-I original equipment manufacturer and duty is paid only for the purchase price. However, when initially the moulds are supplied by M/s. Toyota Kiriloskar Ltd. to the Tier-I customer, original equipment manufacturer value the goods under Rule 4(5)(a) or 4(5)(b) along with the mould and ultimately when the goods reach at the automobile manufacturer, the excise duty is paid on the purchase order placed along with unit amortization cost. Moreover, the Appellant is not aware about the quantity of the goods which can be manufactured by using the mould since the cost and other factors regarding the manufacturing is only known to the automobile manufacturer. Ld. Counsel also draws our attention the relevant provisions under Section 4 of the Central Excise Act, 1944 and Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and also the explanation (2) inserted vide Finance Act, 2003 w.e.f. 01.03.2003, which reads as follows : Explanation 1]: For removal of doubts, it is hereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nternational Auto (supra) under Rule 57F (2) of Central Excise Rules, 1944 is pari materia to Rule 4(5)(b) of Cenvat Credit Rules. Ld. Counsel further submits that the adjudication authority has not accepted the above contention by following the decision of the Tribunal in the matter of M/s. Bhor Industries Ltd. Vs. CCE, Pune-II reported in 2017 (349) E.L.T. 753 (Tri.-Bom.). However, the issue considered in the matter of Bhor Industries Ltd (supra) is different, since the customer of the appellant supplied dies/tools to the job worker without amortizing the cost of the same. In appellant's case, the OEMs being the customers of the appellant have amortized the cost of the moulds supplied by them. Further the issue was considered in the matter of Essar Steel Ltd. (supra) and it is categorically held that "Section 4(5)(a) of the CENVAT Credit Rules is in pari materia with Rule 57F(4) of the Central Excise Rules, 1944. 10. The Ld. Counsel further submits that the Respondent is making an attempt to impose a condition which is impossible to fulfill. The Appellant is not in a position to know the details of the cost of free mould received, effective life of such mould, Department noting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bangalore Vs. Pragathi Concrete Products (P) Ltd., - 2015 (332) ELT 819 (SC) iii. CCE Vs. Punjab Chem and Pharam - 2001 (135) ELT 227 and Asia Automotive Ltd., Vs. CCE 1999 (113) ELT 841 iv. Padmini Products Ltd., Vs. CCE-1989 (43) ELT 195 (SC) and CCE Vs. Chemphar Drugs & Liniments 1989 (40) ELT 276 (SC) v. Ispat Industries Ltd., Vs. CCE - 2006 (199) ELT 509 (Tri - Mum) and NIRC Ltd. Vs. CCE - 2007 (209) ELT 22 (Tri - Del.) vi. Mutual Industries Ltd., Vs. Collector of Central Excise, Mumbai- 2000 (117) E.L.T. 578 (Tri.-LB) vii. M. Tex & D.K. Processors (P) Ltd., Vs. Commissioner of C. Ex., Jaipur 2001 (136) E.L.T. 73 (Tri. Del.) viii. Mech Form Vs. Commissioner of Central Excise, Daman 2014 (309) E.L.T. 492 (Tri. Ahmd.)- affirmed by Supreme Court Commissioner Vs. Mech Form 2015 (320) E.L.T. A180 (S.C.). ix. International Auto Ltd., Vs. Commissioner of Central Excise, Bihar- 2005 (183) ELT 239 (SC). x. Vako Seales Pvt Ltd., Vs. Commissioner of Central Excise- 2016 (344) E.L.T 482 (Tri-Mumbai) xi. Menon & Menon Ltd., Vs. Commissioner of C. Ex. & Cus., Pune-II- 2006 (195) E.L.T. 38 (Tri. - Mumbai) affirmed in 2015 (325) E.L.T. 10 (S.C.) xii. CCE & C., Ahmadabad V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I - 2018 (364) E.L.T. 945 (Tri. - LB) ii. Prabhat Castings Vs. CCE, Belgaum - 2001 (137) E.L.T 964 (Tri. - Bang.) iii. Tigrania Metal & Steel Industries P. Ltd., Vs. CCE - 2015 (326) E.L.T650 (Bom.) iv. Bhor Industries Ltd., Vs. CCE, Pune - III - 2017 (349) E.L.T 753 (Tri. - Mumbai) v. Consim Info Pvt. Ltd., Vs. Commissioner of GST & C. Ex., Chennai - 2019 (21) G.S.T.L. 447 (Tri. - Chennai) vi. Vishay Components India Pvt. Ltd., Vs. Commissioner of C. Ex., Pune III - 2018 (8) G.S.T.L 196 (Tri. - Mumbai) vii. Jay Yuhshin Ltd., Vs. CCE, New Delhi - 2000 (119) E.L.T 718 (Tribunal - LB) viii. M/s. Automotive Stampings and Assemblies Ltd., Vs. CCE, Pune - I - 2015 (5) TMI 374 - Cestat Mumbai ix. Bhagwati Spherocast Pvt. Ltd., Vs. Commr. of C. Ex., Ahmedabad - II - 2019 (369) ELT 1338 (Tri. Ahmd.) x. Mutual Industries Ltd., Vs. Collector of Central Excise, Mumbai- 2000 (117) E.L.T. 578 (Tri.-LB) xi. Vimal Moulders (India) Ltd., Vs. Commissioner of C. Ex., New Delhi - 2003 (161) E.L.T. 834 (Tri. - Del.) xii. Aditya Appliances Pvt. Ltd., Vs. Commissioner of C. Ex., Pune - I -2013 (293) E.L.T 238 (Tri. - Mumbai) 16. Heard both sides and perused the records. 17. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
