Assessable value includes recovered tools-and-dies costs; penalty upheld for non-disclosure of customer recoveries.

Additional charges recovered from customers towards tools and dies were held includible in the assessable value of the final products on an amortised basis, as the Tribunal followed settled precedent treating the proportionate cost as part of valuation. The Tribunal also found penalty sustainable because the assessee did not produce material to show disclosure of these recoveries to the Revenue; the omission was treated as suppression of material facts. Accordingly, both the valuation objection and the penalty challenge failed, and the impugned order was sustained in full.

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Issues: (i) whether the cost recovered from customers towards tools and dies was includible in the assessable value of the final products; (ii) whether penalty was sustainable for non-disclosure of such recoveries.

Issue (i): whether the cost recovered from customers towards tools and dies was includible in the assessable value of the final products.

Analysis: The dispute turned on whether the additional charges recovered through debit notes, representing the cost of tools and dies manufactured by the assessee and used in production, formed part of the assessable value on an amortised basis. The Tribunal noted that the issue had already been settled by the Larger Bench and followed in subsequent decisions, supporting inclusion of such proportionate cost in the assessable value.

Conclusion: The cost recovered towards tools and dies was includible in the assessable value.

Issue (ii): whether penalty was sustainable for non-disclosure of such recoveries.

Analysis: The Tribunal found that the assessee had not shown any material to demonstrate disclosure of the additional recoveries to the Revenue. In the absence of such disclosure, the Tribunal treated the omission as justifying penal consequences, consistent with the view that suppression of material facts supports imposition of penalty.

Conclusion: The penalty was sustainable.

Final Conclusion: The appeal failed on both valuation and penalty, and the impugned order was sustained in full.

Ratio Decidendi: Where an assessee recovers additional charges from customers towards tools and dies but does not disclose those recoveries, the proportionate cost is includible in assessable value and penalty may be imposed for suppression of material facts.

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