2018 (3) TMI 602

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....uction of the components that go into lifts and escalators cannot be accurately determined since some of them are manufactured by the appellant while the others are procured from third parties. For the period 1.1.2005 to 31.12.2005, the original adjudicating authority took up finalization of provisional assessment and ordered differential duty liability of Rs. 1,44,51,572/- with interest thereon. On appeal, Commissioner (Appeals) vide the impugned order dated 29.5.2009 allowed the appeal partly, however, upheld the adjudicating authority's order in respect of the following:- (a) Computer processing charges (b) Consultancy and Professional (c) Power (Factory) (d) Diesel (Factory) Aggrieved, the appellants are now before th....

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....ervice tax credit wherever they are eligible. The respondent erred in reckoning the accounts to the cost of production and linking the same to the taking of service tax credit which is inappropriate. 2.4 As regards the head, Consultancy and Professional charges, the respondent ought to have seen that the department has not disputed the fact that the above charges are consultancy charges. The expenses are suggested to be classified under administrative over heads in the impugned order. The respondent should have seen that if the same had been done as per CAS-4, administrative over heads relating to production activity alone would get included in the cost of production. The respondent has reckoned the costing standard to arrive at cost in ....

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....   3,79,86,653 60,36,431 1,53,64,732   Difference (E-D)     93,28,302       Excise Rate 16.32%     Excise duty demanded 15,22,379 Break-up for above allocation GL Department Consultancy & Professional Computer Process Charges Power Fuel -Diesel 1 2 3 4 5 6 0610 Production - - 34,94,083 - 0611 Production - - - 17,02,781 0740 Production - 2,70,057 - - 0740 M1 Centre - 24,000 - - 0749 Product Development 5,000 - - - 0749 Production 6,500 - - - 0749 Quality 48,300 - - - 0749 Purcha....

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....M1 Centre etc. and therefore allocation of the entire proportion of factory expenses to production is unwarranted. 5.2 So also in respect of consultancy and professional charges, the lower appellate authority has held that charges relating to technical consultancy has to be charged to production and this becomes production overhead item; that legal consultancy charges, filing of appeals, writ petitions also have relevance to production and has upheld the original authority's order on this score. However, the appellant's contention is that as per CAS 4, only those administrative heads relating to production activity alone could get benefit in the cost of production and that the consultancy and professional charges are such that th....