2015 (10) TMI 1359 - AT - Central Excise

Tribunal dismisses Revenue's appeal on development charges & tool cost inclusion, directs 'Excise duty' verification for justice.

The tribunal dismissed the Revenue's appeal on the inclusion of development charges and tool cost in the assessable value, as the finished goods were ... Valuation - demand u/s 11D for amount collected in the name of Excise Duty - Held that:- So far as the amount collected separately from buyers to the extent of ₹ 6,53,169.36 is concerned, even though collection made was prior to introduction of Section 11D, it is necessary to verify whether this money has gone to the treasury or not. This can be stated following the ratio laid down by the Hon'ble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. Vs. CCE - [2005 (3) TMI 116 - SUPREME COURT OF INDIA]. It may be stated that no one can be enriched at the cost of the state following the ratio laid down by the Apex Court in the case of S.P. Chengalvaraya Naidu Vs. Jagannath - [1993 (10) TMI 315 - SUPREME COURT] and no Court shall allow the party to retain the gain made by a person what that was not due to him. Therefore assessee is required to deposit the same even in absence of Section 11D of the CEA,1944. The authority shall verify the deposit particulars and evidence and pass appropriate order on this limited issue only. Revision of cost has no significance when it is supplied by buyer to the assessee not being liable to duty because its finished goods are ultimately exempted which remained undisputed by Revenue. - Decided partly in favour of Revenue. Issues Involved:1. Inclusion of development charges in the assessable value of components.2. Inclusion of tool cost in the assessable value of components.3. Treatment of amount collected under 'Excise duty' on tools.4. Revision of the cost of inputs supplied by buyers.Analysis:1. The show cause notice raised the issue of including development charges in the assessable value of components, contending that it forms part of the assessable value under Section 4 of the Central Excise Act, 1944. The assessee argued that even if included, the finished goods are duty-exempt, rendering the issue irrelevant.2. Similarly, the notice raised the inclusion of tool cost in the assessable value, linking it to the manufacture of components. The assessee argued that this issue has no consequence to the revenue due to the duty exemption on the finished goods.3. Regarding the amount collected under 'Excise duty' on tools, the notice sought to add it to the assessable value for redetermination. The assessee claimed that the amount was deposited, thus Section 11D did not apply. However, the tribunal emphasized the need to verify if the money was remitted to the treasury, citing legal precedents on unjust enrichment.4. The issue of revising the cost of inputs supplied by buyers was also addressed. The assessee contended that even if the cost is included in the assessable value, the final duty-exempt goods make this issue irrelevant.5. The Revenue appealed against the inclusion of development charges and tool cost. The tribunal noted that there was no dispute that the finished goods were duty-exempt, leading to the dismissal of the Revenue's appeal on these grounds.6. The tribunal directed verification of the amount collected separately under 'Excise duty' to confirm if it was deposited into the treasury, emphasizing the principle of not allowing unjust enrichment.7. Ultimately, the tribunal dismissed the Revenue's appeal on all counts except for the verification of the specific amount collected separately. The decision aimed to serve the interests of justice by addressing the outstanding verification issue.8. The tribunal highlighted its authority to advance the cause of justice, pointing out the need for a comprehensive examination of all relevant issues in the adjudication process for a just outcome.