TaxTMI 
TaxTMI 
2019 (4) TMI 1461
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....tor vehicles to M/s Hyva (India) Pvt. Ltd. (Hyva), for the purpose of fabrication of body thereon. Since the activity of body building has been specified as amounting to manufacture as per Chapter Note 3 to Chapter 87 of the Central Excise Tariff Act, 1985. Hyva were required to pay duty on the motor vehicles on which body is built. For discharging duty, Hyva availed cenvat credit of the duty paid by TML on the chassis. The dispute in this case is regarding valuation of the body built vehicles to be adopted for payment of duty by Hyva. Since Hyva were not selling the motor vehicles, but were dispatching to TML, the value for payment of duty was to be determined by taking recourse to Rule 11 of the Central Excise Valuation (Determination of ....
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....ave been challenged on the following main grounds : (i) Excise duty has been correctly discharged on the body built chassis. The valuation has been arrived on the basis of Section 4(1)(b) read with Rule 6 of the Valuation Rules. Hyva has followed the decision of the Hon'ble Apex Court in the case of Ujagar Prints (supra). The Apex Court held in that case, in the context of processing of fabrics of job work basis, that the assessable value of the processed fabric would be the value of the grey cloth in the hands of the processor plus the value of the job work done plus manufacturing profit and expenses. On these lines, Hyva has adopted the assessable value on the chassis cleared to TML in their invoices. (ii) In terms of th....
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.... (217) ELT 506 (Tri.-LB). (vi) He also raised the ground of time bar. 5. The ld.D.R. justified the impugned order. His submissions are summarized below : (i) The Apex Court in the case of Ujagar Prints (supra) has held that the value of the raw material in the hands of job worker needs to be taken. The value of the chassis in the hands of Hyva has to be arrived at on the basis of landed cost as held by the adjudicating authority. This includes addition of transport cost as well as transit insurance. This view also finds support in the Tribunal's decision in the case of Goel Ispat Ltd. Vs. Commissioner of Central Excise, Puducherry reported in 2017 (6) GSTL 210 (Tri.-Chennai). He added that even if the transport charges ....
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....for paying duty on the chassis. To this account, they have added the body building charges and paid the duty. The Department is of the view that the value of raw material i.e. chassis in the hands of Hyva, not only includes the assessable value of the chassis (in the hands of TML), but also transport cost and transit insurance (incurred by TML) to deliver such chassis in the premises of Hyva. The Department has proposed certain other additions, which will be discussed in the succeeding paragraphs. 8. Proposal for adding transport cost and transit insurance is strongly resisted by the appellant with the argument that the Apex Court has directed only the value of raw material to be taken, which is nothing but the assessable value of the ch....
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....d 1-72002 which inter alia clarified that cost of transporting raw materials/inputs to the premises of job work will also be added to determine the cost of raw material/input. The relevant portion of the circular is reproduced below : Sl. No. Points of doubt Clarification 11. How will valuation be done in cases of job work? Please also refer to Board's Circular No. 619/10/2002-CX, dated 19-2-2002 Cost of transporting the raw materials/inputs to the premises of the job-worker will also be added to determine the cost of the raw material/input. [1997 (071) ECR 381 (TRIB)] GIL have contended that upto 2003-04, they were incurring cost of transportation of ingots and that the conversion charges collected by them inc....
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....ation charges in the impugned order." By following the above decision, we conclude that the transport cost as well as transit insurance are required to be added for payment of duty by Hyva. 11. The further question for decision in this case is whether it is required to add cess at the rate of .125% as well as an amount of Rs. 10,000/- as has been done by the adjudicating authority. The Hon'ble Supreme Court in the case of Dai Ichi Karkaria Ltd. (supra), has held that the cost of production of excisable product cannot include the element of duty paid on the raw material, but availed as modvat credit by the manufacturer. In this case, the automobile cess paid at the rate of .125% by TML is not availed as cenvat credit by Hyva and hence ....