2018 (1) TMI 820

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....hom they supply castings manufactured making use of these patterns. While manufacturing such castings, appellants amortized the entire cost of these patterns against the first Purchase Order received from M/s.Bharat Earth Movers Ltd. (BEML) for supply of 75 pieces of the castings. Subsequently several purchase orders were placed by BEML for manufacture of castings using the same pattern. The appellant having amortized the entire cost of the patterns for the quantity supplied against first purchase order, they supplied castings against subsequent purchase orders without amortizing the cost of the patterns used. The department entertained the view that appellant ought to have amortized the cost of patterns against supply of all castings manuf....

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....n mentioned in the purchase order. As per first Purchase Order 75 pieces had to be manufactured. The appellants amortized the entire cost of mould for 75 pieces and paid excise duty. Therefore, amortization cost was equal to total cost of the pattern divided by number of castings manufactured. Thereby, appellants have paid excise duty on the full value of pattern for 75 pieces by way of amortization. If appellant had manufactured more pieces, the amortization cost per piece would have been less. Thus appellants have paid excise duty on the entire cost of the pattern. Instead of 75 pieces, if more pieces are manufactured, then the cost of the pattern would have been distributed to these increased pieces also. That since the entire cost of pa....

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....Section 4 of Central Excise Act, 1944, transaction value is the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of sale or at any other time, including but not limited to, any amount charged for, or to make provision for advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. 5.1 As per the above p....