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TMI Blog2002 (4) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in the wiring harness. In such cases, the value of the free supply component parts were not added to the prices of wiring harnesses while fixing their assessable value and paying excise duty on them. The order impugned in this appeal has demanded duty attributable to the price of such components and has imposed penalties on the manufacturer as well as the officers of the company. The period of duty demand extends from March, 1995 to January, 1997. The show cause notice was issued on 13-3-2000. 2. The law relating to the inclusion of the price of free supply items in the assessable value of goods produced with the free supply materials is well settled, that their value is required to be included. Therefore, that issue is not in conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wiring harness, the harnesses were sent back by the appellants to their buyers who were the senders of the components. Particulars relating to the receipt of the components were also entered in the documents under which the wiring harnesses were returned. It has been specifically pointed out by the appellants that they and their buyers who sent the free supply components were located in the jurisdiction of the Dy. Commissioner of Central Excise who had given the buyers the permission to send the free supply components under Rule 57F(3). It is their further submission that the purchase orders placed by the appellant's buyers specifically stated that the parts in question will be supplied free by them and their value was not included in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was used in the payment of duty on wiring harnesses. However, in other cases (involved in the impugned order) the appellant received the free supply components without any Modvat credit under Rule 57F(3). The purchase orders also stipulated that the price of harness was to exclude the price of free supply components. In such cases they did not add the value of free supply goods to the selling price of wiring harnesses. The learned Counsel submitted that the inclusion or exclusion of the free supply materials depended upon the arrangement between the appellants and their buyers and the Modvat rule followed in each case and not upon any intention to pay or not to pay the full Central Excise duty on the wiring harnesses. They had followed a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases like the appellant, the Tribunal had held that extended period under proviso to Section 11A of the Central Excise Act was not attracted. In this context he referred to this Tribunal's decision in the case of R.H. Industries v. CCE, Chandigarh - 2001 (133) E.L.T. 798. 5. As against the aforesaid submissions on behalf of the learned Counsel for the appellants, the learned DR has submitted that the procedure followed by the appellant was not correct or revenue neutral. In this context, he referred to the Larger Bench decision of this Tribunal in the case of Jay Yushin Limited - 2000 (119) E.L.T. 718 wherein this Tribunal had held that revenue neutrality can be accepted only in a situation where the availability of the credit on the fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no positive evidence in the nature of documents or statements showing that the exclusion of value of certain components was made by the appellant with intent to evade payment of duty. Therefore, a finding on the issue is to be deduced from the conduct of the appellant. What weighed with the adjudicating authority is the fact that the appellant had included the value of similar materials in certain cases even as he excluded their value in some other cases. The adjudicating authority has held that such dual practices could be treated as resulting from intent to evade payment of duty. As against this, the appellant's explanation is that the circumstances and procedure followed were entirely different in both the types of cases and the dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply materials in the value of the wiring harness and if they were to pay duty including on that value, they could have taken Modvat credit on those components. Thus, they stood to no gain by the exclusion of the value of the freely supplied items. In the cases, like M/s. Hindustan Motors, where the components and credit were both transferred to the appellants, they took the value of the components and Modvat credit into their accounts and paid duty correctly. Thus, wherever duty was paid on the value of free components, credit was utilised and wherever duty was not paid, credit was also not taken. Movement of components, in both the cases, were according to Central Excise procedures. Payment of duty on the value of components posed no ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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