TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 381
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....f valuation of the castings manufactured and cleared by the appellants, they have taken into consideration the cost at which the said patterns are supplied by M/s.BEML, for the manufacture of castings initially. The entire cost of the patterns was amortised for 25, 75 and 75 numbers of different castings as cited above. As the total cost of the patterns was amortised, the appellant did not take into consideration the value of the patterns while clearing the castings cleared on additional orders to their client i.e. BEML. The department contended that the appellants failed to include the amortised cost of patterns in respect of clearances to M/s.BEML in contravention of Rules 4, 6 and 8 of Central Excise (No.2) Rules, 2001.A show cause notice dated 28.04.2006 has been issued and the same was confirmed by the lower authority vide order dated 30.09.2010 and was upheld by the appellate authority vide order dated 17.01.2011. The appellants have carried the case to the Tribunal. 2. The Tribunal vide Final Order No.43212/2017 dated 18.12.2017 upheld the order-in-appeal relying on the judgment of Larger Bench in the case of Mutual Industries Vs CCE Mumbai - 2000 (117) ELT 578 (Tri.)....
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....arger Bench of the Tribunal in the case of Mutual Industries Vs CCE Mumbai - 2000 (117) ELT 578 (Tribunal) is incorrect as the facts of the case are not comparable to the instant case. He submits that the decision in the case of Mutual Industries (supra) was rendered in the context of old Central Excise Valuation Rules, 1975, wherein the wholesale price was the determining factor for the valuation of excisable goods. He submits that Tribunal in the case of CCE Mumbai Vs Mega Rubber Technology Pvt. Ltd. - 2016 (343) ELT 383 (Tri.-Mumbai) held the issue in a similar case in favour of the appellant. He further submits that CBEC vide Circular No.170/4/96-CX dated 23.01.1996 have also clarified that theproportionate cost of value has to be included in the assessable value of the castings which the appellant did it in 25/75/75 castings. 6. Learned counsel submits also that invocation of extended period under proviso to Section 11A was bad in law. The Tribunal, in the case of Star Glass Works Vs CCE Mumbai - 2003 (162) ELT 367 (Tri-Mumbai) [maintained by the Hon'ble Supreme Court in 2004 (163) ELT A46 (SC)], held that the cost of patterns which were supplied free of cost to the customer ....
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....patterns was totally amortised and there was no consideration either in the form of free supply of patterns subsequently to the appellant or any financial consideration given to the appellants further to the supply of patterns for the castings. Under the circumstances, it would not be correct to say that all the castings manufactured need to be amortised, notwithstanding the fact that amount has been already amortised. We find that department and Tribunal in the orders cited above relied upon the case of Mutual Industries (supra). It is clear from the said order that the same was rendered under Rule 5 of Central Excise Valuation Rules, 1975. The relevant paragraphs of the order are reproduced as under: "4. In Flex Industries Ltd. v. CCE, Meerut - 1997 (91) E.L.T. 120 appellants were manufacturing Printed Polyester Films to make packing pouches. Printing of films was done through the medium of Gravure Printing Cylinder. These cylinders are manufactured to suit the needs of individual customers. The finished products were cleared on payment of duty on their value without taking into consideration the value of printed cylinders. Appellant was recovering from customers cost of ....
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....ration for the sale. Further, Rule 5 of Central Excise (Valuation) Rules, 1975 stipulates that where the price is not the sole consideration, the value of the goods shall be based on the aggregate of such price and the amount of the money value of any additional consideration flowing directly or indirectly from the buyer to the assessee. In the instant case, the price of the finished goods has been fixed between the appellant and the customer. Can one say that the price so fixed is the sole consideration for the sale of the finished product when the mould was supplied by the customer. Without the mould supplied by the customer, which is having substantial value, the product could not have been manufactured. So it is crystal clear that the price of the finished goods was fixed by the appellant and the customer taking into consideration the supply of the mould by the customer. In other words, had the mould not been supplied by the customer, appellant could not have agreed to the price of the finished goods at the price as is evidenced by the contract entered into between them. So, the price of the finished goods fixed in the contract between the parties can safely be taken as not the....
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....epartment, we hold that the manufacturer did not suppress or conceal any fact for the purpose of evading payment of duty. No transaction mentioned in the show cause notice falls within six months immediately preceding the date of notice. The period was from 1-10-1986 to 31-8-1990. The show cause notice was dated 25-10-1991 that is, more than one year after the period mentioned in the notice. The show cause notice is clearly barred by limitation. The demand made in the show cause notice is not legally sustainable. Therefore, we hold that the proceedings initiated against the appellant pursuant to show cause notice dated 25-10-1991 is clearly barred by limitation. Consequently the impugned order has to be set aside in its entirety. We do so." 9. However, we find that Tribunal in the case of Mega Rubber Technologies Pvt. Ltd. (supra) has analyzed the case in terms of new Central Excise Rules where the concept of transaction value has come into effect. The Tribunal observed as follows: "6.1 We find that the first appellate authority has upheld the contentions of the assessee on the provisions of applicability of Rule 16 of Central Excise Rules. The said rules empower the assessee to....