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<h1>Tribunal rules modification charges to be included in assessable value under Central Excise Valuation Rules</h1> <h3>Gestamp Automotive India Pvt. Ltd. Versus CCE, Pune-II</h3> Gestamp Automotive India Pvt. Ltd. Versus CCE, Pune-II - 2017 (7) G. S. T. L. 337 (Tri. - Mumbai) Issues:1. Whether the modification charges for dies/tools received free of cost from the customer should be included in the assessable value of excisable goods manufactured.2. Whether the demand is time-barred due to lack of suppression of facts.3. Whether the case is of revenue neutrality due to the duty paid by the appellants and its impact on the customer's cenvat credit eligibility.Issue 1: Modification Charges Inclusion in Assessable ValueThe appellants received modification charges for dies/tools from their customer, used in manufacturing motor vehicle parts. The department argued that these charges should be amortized in the value of manufactured parts similar to the cost of dies. The Ld. Counsel contended that the modification activity is separate, already taxed, and not related to manufacturing. Citing relevant judgments, the appellants argued against inclusion. However, Rule 6 of Central Excise Valuation Rules 2000 mandates inclusion of die/tool costs in assessable value, whether original or modified. The Tribunal held that modification charges must be included in the assessable value, as they enhance the value of tools/dies used in manufacturing.Issue 2: Time-Barred DemandThe appellants claimed the demand was time-barred as there was no suppression of facts, citing regular audits and proper accounting. However, the department argued that the extended period was rightly invoked due to non-disclosure of modification charges collection. The Tribunal found a clear suppression of fact as the balance sheet did not specify the charges' nature, just as service sales. Consequently, the extended period invocation was justified, and penalty under Section 11AC was upheld.Issue 3: Revenue NeutralityThe appellants argued for revenue neutrality, claiming the customer received cenvat credit, making the demand redundant. However, the department refuted this, citing lack of evidence on duty payment by the customer and the extended period invocation. The Tribunal agreed, stating that as the demand was valid due to suppression of facts, cenvat credit couldn't be allowed to the customer, failing the revenue neutrality test.In conclusion, the Tribunal upheld the impugned order, dismissing the appeal based on the inclusion of modification charges in the assessable value, the time-barred nature of the demand due to suppression of facts, and the lack of revenue neutrality evidence.