TaxTMI 
TaxTMI 
2010 (9) TMI 401
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....products on loan lincencee/contract manufacture basis. RHCL was the sole customer of these products manufactured by Wintac. As Wintac had already sold the relevant technical know-how to RHCL, it was tentatively held by the authorities that Wintac had received technical know-how for manufacture of P or P Medicines free of cost from its customer. The technical know-how involved was of value Rs. 25 crores. This was additional consideration includible in the assessable value of the products manufactured and sold by Wintac in terms of Rule 6 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. During investigation, Wintac admitted that the technical know-was was absolutely essential for the manufacture of the subject goods. In the Loan Licencee Agreement dated 12-7-2000, it was specified that "the purchaser (RHCL) shall from time to time disclose and communicate to manufacturer (WINTAC) so much of the know how as purchaser may in its absolute discretion consider necessary or adequate for the manufacture of the said product from time to time and upon the conditions herein contained." 2.1 The definition of technical know-how contained in the Technical....
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....Duty was a tax on manufacture and production of excisable goods. Any demand of differential duty short levied or short paid had to be with reference to the excisable goods manufactured and cleared from a factory. Where excisability of the goods was not an issue, demand for duty could arise on account of a dispute regarding the rate of duty applicable or a valuation dispute with respect to the goods involved. In any case, the demand had to be quantified with reference to the excisable goods involved. In the instant case, the assessee received Rs. 25 crores on sale of technical know-how in respect of 79 products. On 12-7-2000, Wintac entered into an Agreement with RHCL for manufacture of 19 products for which RHCL would give the required technical know-how. The assessee contended that in fact only nine products were ultimately manufactured and sold to RHCL. The Show Cause Notice had not indicated the value of these nine products cleared during any particular period or the additional consideration to be loaded on the said value of the goods on account of receipt of free technical know-how. RHCL had also claimed that they had got such medicines manufactured by third parties such as M/s....
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....Show Cause Notice. 3.1 Revenue relied on the following case-laws :- (i) Ucal Fuel Systems Ltd. v. CCE, Chennai [2007 (216) E.L.T. 370 (Tri.-Chennai)] (ii) CCE, Jamshedpur v. Tata Motors [2009 (237) E.L.T. 147 (Tri.-Kolkata)] (iii) K.R.C.D. (I) Pvt. Ltd. v. CCE, Mumbai [2004 (176) E.L.T. 427 (Tri.-Mumbai)] (iv) Moriroku UT India (P) Ltd. v. State of UP [2008 (224) E.L.T. 365 (S.C.)] 3.2 During hearing, the learned JCDR reiterated the grounds raised in the appeal and took us through the case-laws relied on in support of the appeal. 4. The learned Counsel appearing for the assessee relied on the decision of the Tribunal in the following cases :- (i) CCE, Vadodara v. Tide Industries [1999 (111) E.L.T. 555 (Tribunal)] (ii) Bangalore Pharmaceuticals and Research Laboratory P. Ltd. v. CCE, Bangalore [2010 (252) E.L.T. 135 (Tri.-Bang.)] (iii) R & B Falcon (A) Pty Ltd. v. Commissioner of Income Tax [2008 (301) ITR 309 (S.C.)] 5. We have carefully perused the case records and also considered the rival submissions. We observe that Wintac had enter....
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....apportion the cost relatable to technical know-how to a unit of either of the nine medicines manufactured and cleared by the appellant during the material period. 5.2 The Commissioner found that the Show Cause Notice was issued invoking larger period, but the notice did not indicate the clearances in respect of which the notice was issued. There was no 'relevant date' for the demand raised in the Show Cause Notice. We find considerable merit in this finding of the Commissioner. 5.3 The pertinent portion of Section 11A of the Act reads as follows : SECTION 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or [erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder], a Central Excise Officer may, within [one year] from the relevant date, serve notice on the perso....
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....appellants in support of their claim that in the subject case, in the absence of a mechanism to compute the tax liability towards cost relatable to technical know-how, such duty was not liable to be paid. "Answer : In terms of the provisions of sub-section (1) of section 115WA, an employer in India is liable to FBT in respect of the value of fringe benefits- (a) provided by him to his employees; and (b) deemed to have been provided by him to his employees. The scope of fringe benefits provided or deemed to have been provided is defined in section 115WB. Sub-section (1) of the said section defines the scope of fringe benefits provided by the employer to his employees. Similarly, sub-section (2) of the said section defines the scope of fringe benefits deemed to have been provided by the employer to his employees. Therefore, sub-section (2) expands the scope of sub-section (1) through a deeming provision. The provision relating to the computation of the value of the fringe benefits is contained in section 115WC. It is a settled principle of law that where the computation provisions fail, the charging section cannot be effectuated. Therefore, if there is no provision for computing....