TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 889
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....odification of dies/ tools which were received free of cost from their customer viz. M/s Volkswagen India P. Ltd. for manufacturing parts of motor vehicles. The appellants had carried out some modification in the dies / tools as per the directions of the customer and recovered the cost of the modification under heading technical support service for modification operationalizing of dies tools. For the cost of modification the appellants issued service invoice. They also paid service tax on it. During the period from 2009-10 to 2014 ( upto September 2014 ) the appellants received the amount under head Sale of service as appearing in their P&L A/c for the respective period as under:- Year Amount received against the sale of service (Rs. ) 2....
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.... that the demand is time barred as there is no suppression of fact on the part of the appellants. The appellant's books have been regularly audited in February 2009 to June 2012, July 2012 to July 2013 and April 2010 to March 2013. Therefore all the records related to the receipt of service charges towards die modification was reflected in the books of accounts. Accordingly, the extended period should not have been invoked. He further submits that the entire case is of revenue neutrality for the reason that the entire goods manufactured out of the modified die supplied to Volkswagen India as original equipment which is further used in the manufacture of motor vehicles. The customer Volkswagen India is entitled for the cenvat credit for ....
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....oes not reveal it is related to the modification of die. Therefore it cannot be said that this fact was known to the department or to the audit officers. Therefore there is a clear case of suppression of fact. Hence the appellant do not deserve for any relief on limitation. As regarding revenue neutrality, he submits that it is a matter of fact. The appellants have not produced any detail of duty payment by the customer to support their submission of revenue neutrality. Moreover, the present demand is for extended period. In respect of demand of duty, short payment of duty due to suppression of fact the same cannot be passed on as cenvat credit to the buyer of the goods. Therefore the submission that the case is revenue neutral is not accep....
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....ng goods and services, whether supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale of such goods, to the extent that such value has not been included in the price actually paid or payable, shall be treated to be the amount of money value of additional consideration flowing directly or indirectly from the buyer to the assessee in relation to sale of the goods being valued and aggregated accordingly, namely : - (i) value of materials, components, parts and similar items relatable to such goods; (ii) value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar items used in the production of such goods; (iii) value of material con....
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....on value." From the above rule, it can be seen that the amortisation cost of die/tools/ moulds has to be included in the assessable value of the excisable goods manufactured out of such tools/die/mould supplied free of cost by the customer even though it does not make any difference whether the appellants have carried out the modification. Even if the modification is carried out by someone else, the value of modification will enhance the value of the tools/dies. When such modified tools/dies used by the manufacturer the said enhanced value shall be considered for taking the cost of the tools/die for purpose of amortisation. Therefore whether it is the original cost of the die or enhanced cost due to addition of modification charges it is o....