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Issues: (i) Whether the proportionate cost of tools supplied free of cost by the customer was includible in the assessable value of the manufactured parts. (ii) Whether invocation of the extended period of limitation was justified on the ground of suppression of facts.
Issue (i): Whether the proportionate cost of tools supplied free of cost by the customer was includible in the assessable value of the manufactured parts.
Analysis: The appellant manufactured motor vehicle parts using tools supplied free of cost by the customer. The lower authorities relied on binding precedent holding that the proportionate cost of moulds or tools supplied by the customer forms part of the assessable value as additional consideration. The argument based on depreciation or reduction of the tools' book value was held to be irrelevant to excise valuation.
Conclusion: The cost of the free-supplied tools was includible in the assessable value, against the assessee.
Issue (ii): Whether invocation of the extended period of limitation was justified on the ground of suppression of facts.
Analysis: The demand was raised beyond the normal period, and the authorities found that the appellant had not disclosed receipt of free supplies. In view of the settled legal position on valuation and the appellant's expected awareness of the governing precedent, the non-disclosure was treated as suppression sufficient to attract the longer limitation period.
Conclusion: Invocation of the extended period of limitation was justified, against the assessee.
Final Conclusion: The appeal failed on both valuation and limitation, and the demand was sustained.
Ratio Decidendi: Free supplies by the customer used in manufacture are includible in assessable value as additional consideration, and non-disclosure of such material facts can justify the extended period of limitation.
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