TaxTMI 
TaxTMI 
2018 (6) TMI 175
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for the period 1999-2000, it was observed that the appellants received a sum of Rs. 80,44,500/- from various parties for the manufacture of tools which were to be used for the manufacture of motor vehicle parts but duty was not paid on tools cost received from their customers when the tools manufactured in house were to be used by the appellants for the manufacture of motor vehicle parts. It was seen from the purchase orders that the appellants had manufactured tools for M/s Fiat India Automobiles Ltd. and used the same captively for which they received a sum of Rs. 80,44,500/- as tooling cost. M/s Fiat India Automobiles has mentioned in their purchase agreement dt. 20.03.1999 that they would pay tooling cost to the appellants and maintena....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e remand proceedings, the adjudicating authority confirmed the demand of duty along with interest and imposed penalty of equal amount. Aggrieved from the order of adjudicating authority, the appellants went in appeal before Commissioner (Appeals). The first appellate authority upheld the order of adjudicating authority and rejected the appeal filed by the appellants. Aggrieved from the same, the appellants have filed this appeal. 3. Ld. Advocate for the appellants invites attention to para 6 & 7 of the Order-in-Appeal and contends that there is an error in the order of Commissioner (Appeals) wherein he has held that the appellants should have amortized the entire cost of tools by taking into account the ordered quantity of the goods, which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....We find that the issue of apportioning the cost of patterns to assessable value of castings made from patterns was considered by CBEC in Circular dt. 23.01.1996, where it was laid down as below: "3. The matter has been examined and it is hereby clarified that the proportionate cost of pattern has to be included in the assessable value of the casting even in cases, where such patterns are being supplied by the buyers of the casting or are got prepared/manufactured by the job workers at the cost of the buyer. In cases, where there is difficulty in apportioning the cost of pattern, apportionment can be made depending on the expected life and capability of the pattern and the quantity of castings that can be manufactured from it and thus worki....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... However, during a particular period, the use of the set of cylinder may not be exhausted as only 4 lakh printed pouches are manufactured during the period. If so, it has to be regarded that Rs. (x ÿ 10 Lakhs) x 4 Lakhs is the proportionate value of cylinder utilized in the manufacture of finished products during the period and only this value can be added to the value of printed pouches. This rational principle of proportional value addition has been approved by the Board and we are of the opinion that Board was right in doing so. This has to be arrived at after making a realistic estimate of the expected life and capability of the cylinders and determining the appropriate proportion of the value of cylinders to be added to the value....