TaxTMI 
TaxTMI 
2010 (11) TMI 906
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....e Central Excise Tariff Act, 1985. The Acetylene is dissolved in Acetone. The period of dispute is from 1-1-97 to January, 2001. The appellants were collecting "cylinder maintenance charges" and "cylinder rentals" from their buyers. While "cylinder maintenance charges" at the rate of Rs. 2/- per Cu. Mtr. for Oxygen and Rs. 10 per Cu. Mtr. for dissolved acetylene, were being collected from all the buyers of gases including the buyers who were supplied gas in their own cylinders, the "cylinder rental" were being collected only from those buyers to whom the gases were supplied in the cylinders owned by the appellants. The Department was of the view that the "cylinder maintenance charges" and "cylinder rental charges" were includible in the ass....
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....he same is to be treated as an input and not the maintenance charges, (b) the remaining duty demand of Rs. 7,18,132/- for the period from 1-1-97 to 30-6-2000 pertaining to "cylinder rental" and charges for expenses incurred on repairing & servicing of cylinders was dropped, (c) the entire duty demand of Rs. 1,15,155/- for the period from 1-7-2000 to 31-1-2001 on account of "cylinder maintenance charges" and "cylinder rental" was confirmed, as according to the adjudicating authority w.e.f. 1-7-2000, these charges being part of "Transaction Value", were includible in the assessable value, (d) interest under Section 11AB on the duty demand confirmed was demanded, (e) an amount of Rs. 1,15,155/- along with interest of Rs. 7,039/- earlier paid b....
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....ied in the appellant's cylinders or customers' cylinders, that the Department's allegation that bulk of the maintenance charges are nothing but the cost of Acetone had not been raised in the show cause notice and, hence, the same cannot be taken into account at the stage of adjudication, as it would amount to going beyond the show cause notice, that in any case, if the cost of Acetone in which the Acetylene gas is dissolved for the purpose of sale, is included in the value of the Acetylene, the Acetone has to be treated as an input and in that case, Modvat credit of duty paid on Acetone must be allowed, that the lower authorities have wrongly disallowed the Modvat credit on Acetone, even though the duty paying documents had been produced, t....
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....relevant facts on the part of the appellant. 9. We have carefully considered the submissions from both the sides and perused the records. The duty demand for the period from 1-1-97 to 30-6-2000 amounting to Rs. 8,98,544/- is on account of non-inclusion in the assessable value of cylinder maintenance charges which were being collected from all the buyers and cylinder rental charges being collected only from those customers to whom the gases were being supplied in cylinders owned by the appellants. The duty demand of Rs. 1,15,155/- is also on the same ground for the period from 1-7-2000 to January, 2001. The Original Adjudicating Authority in respect of duty demand for the period from 1-1-97 to 30-6-2000 has confirmed only that portio....
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.... input for the Acetylene which is marketed and, therefore, we have no doubt that the cost of Acetone would be includible in the assessable value. Though in the show cause notices, the fact that the cylinder maintenance charges being collected from every customer, even when the Acetylene gas is sold in the cylinders brought by the customers are mainly the cost of Acetone used for dissolving the Acetylene, was not mentioned, we find that this fact was disclosed by the appellant themselves in the course of proceedings before the Original Adjudicating Authority while throughout the period of dispute, the appellants were collecting the cost of Acetone used for dissolving acetylene, from their customers under the guise of cylinder maintenance cha....