TaxTMI 
TaxTMI 
2016 (2) TMI 143
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....supplied to them free of cost by the chassis manufacturers. The appellant built bodies of the buses on the chassis and cleared the same on payment of duty w.e.f. 1.4.2007. Rule 10 A was introduced to the Central Excise Valuation Rules, 2000 and as per the said provisions, the job worker has to pay duty on the sale price of the principal manufacturer. From the purchase/sale invoice of the appellant, it was observed that the appellant has received duty paid chassis free of cost from the chassis manufacturer and availing credit of duty paid on such chassis and then manufactured body building i.e buses using that such duty paid chassis and the buses so manufactured were cleared by the appellant to the depot /sales office of the chassis manufacturer on payment of central excise duty calculated on the value arrived at by adding the value of chassis received free of cost plus job charges but as per Rule 10 A of the said valuation Rules, the appellant was required to pay duty on the sale price of the chassis manufacturer. Therefore, a show cause notice dated 17.04.2009 was issued to the appellant by invoking extended period of limitation for the period 1.4.2007 to 31.01.2009. The show caus....
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....b work in their factory. The appellant did not sell the complete Motor Vehicles (Buses) but only dispatched it to the Regional Sale Office (RSO) at Karnal. The appellant provided all other information except relevant information for correct valuation of the Motor Vehicles (excisable goods) under Rule 10 A(ii) of the Central Excise Valuation Rules, 20000. Through a vague and general letter, the appellant intimated to the department but denied valid and material information to the department required under Rule 10A(ii). This denial of crucial information to the department was an act of deliberate obstruction to access material information for correct valuation of excisable goods, reflecting their clear intention to evade payment of appropriate Excise Duty. Subsequently, the department was able to receive the relevant information on 16.03.2009 after issuance of summons to M/s. Tata Motors Ltd., Lucknow. To ascertain the contractual terms between the appellant and M/s. Tata Motors Ltd., Lucknow, a statement of Shri Ajay Kumar Gupta, Sr. Manager, Finance was recorded under Section 14 of the Central Excise Act, 1944 on 8.4.2000 in which he explained the terms and condit....
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....graph 5 to 10 of the show cause notice in question. The 'Unlawful Object' of the agreement between the appellant and M/s. Tata Motors is substantiated by the judgement of the Hon'ble Supreme Court of India in the case of M/s. Mc Dowell & Co. Ltd. Vs. Commercial Tax Officer dated 17.04.1985 reported as 1985 SCC (3)/1986 AIR 649. The Hon'ble Supreme Court after discussing a number of binding authorities/case law on the subject came to a conclusion which is as mentioned below:- "We must recognize that there is behind taxation laws as much moral sanction as behind any other welfare legislation and it is a pretence to say that avoidance of taxation is not unethical and that it stands on no less moral plane than honest payment of taxation. In our view, the proper way to construe a taxing statute, while considering a device to avoid tax, is not to ask whether the provisions should be construed literally, or liberally, nor whether the transaction is not unreal and not prohibited by the statute, but whether the transaction is a device to avoid tax, and whether the transaction is such that the judicial process may accord its approval to it. A hint of this approach is to be ....
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....(Section 2(h) of Central Excise Act, 1944) since there is a transfer of possession of body from us to CM. We also understand that the clearance of vehicle after body building to CM amounts to sale under Section 4 of the Sale of Goods Act, 1930 since there is a transfer of property in body from us to CM. Thus, at the time of sale built on chassis to CM, we pay applicable sales tax on our sales consideration and which is accepted by the Sales Tax authorities. 3. In the light of above, we understand that the assessable value of body cleared by us to CM would be sum of the body building charges (under Section 4(1)(a) plus cost of chassis (under Rule 6 of the Valuation Rules since there is flow of consideration from CM to the body builders when CM gives the chassis to the body builders for fabrication). We are paying excise duty on the aforesaid basis." 10. We further find that as per the letter issued by the department to the appellant on 2.08.2007, the Superintendent Preventive written to the appellant that as an inquiry against the body builders who are manufacturing bus bodies on the chassis supplied by the original manufacturer is being conducted, in that context, it wa....
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....In the light of the observation of the Hon'ble Apex Court, we find that in the case in hand, the appellant has disclosed their method of valuation to the department on 1.4.2007. The valuation was known to the Department w.e.f. 1.4.2007 and the Department failed to do any positive act to issue show cause notice within one year from the said date, therefore, extended period of limitation is not invokable alleging suppression. Further we find that in the case of Audi Automobiles (supra), this Tribunal has observed as under:- "22. As regards the penalty, however, we find that the learned Advocate is justified in contending that matter being related to the interpretation of the provisions of law and the fact that the Apex Court in Prestige Engineering (India) Ltd., case had taken a particular view on the aspect of expression "job work", the appellant, taking shelter of the said decision, was seeking to claim benefit in terms of Rule 6. In the circumstances, we don to find any justification for imposition of penalty in the matter in hand. The impugned order does not disclose consideration of this aspect of the matter." 12. In the case of Hyva (India) Pvt. Ltd. (supra), ....