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of <h1>Tribunal rules scrap value should not be added to assessable value of vehicle parts</h1> <h3>MAHINDRA UGINE STEEL CO. LTD. Versus COMMISSIONER OF C. EX., PUNE</h3> The Tribunal held that the value of scrap should not be added to the assessable value of motor vehicle parts. The duty demand and penalties related to the ... Valuation Issues Involved: Appeals filed regarding duty liabilities on inclusion of scrap value, die modification charges, processing cost on motor vehicle parts, and reversal of Modvat credit.Inclusion of Value of Scrap:The case involved a major demand concerning whether the assessable value of motor vehicle parts should include the raw material cost, job charges, and the value realized from the sale of scrap arising from job work. The Tribunal referred to precedents such as Jay Engineering Works Ltd. v. Commissioner of Central Excise and Hindustan Engineering & Industries Ltd. v. C.C.E. The Tribunal held that the value of scrap should not be added to the assessable value of the motor vehicle parts, regardless of whether the scrap is sold or returned to the raw material supplier. The duty on the scrap is paid separately, and including its value in the assessable amount is not justified. Consequently, the duty demand and penalties related to the inclusion of scrap value were set aside.Other Three Issues:The appellant promptly paid the amounts related to die modification charges, processing cost on motor vehicle parts, and reversal of Modvat credit upon being pointed out by the department. The appellant did not press the appeals on these issues as the amounts were small and of routine nature. The department appealed for penalties equal to the determined duties, but the Tribunal found that since the discrepancies were promptly rectified and routine, the Commissioner's decision not to impose penalties was justified.Conclusion:The appeals of the appellant and its officials were partly allowed by setting aside the duty demand and penalties regarding the inclusion of scrap value in the assessable amount of motor vehicle parts. The department's appeal was rejected.
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