TaxTMI 
TaxTMI 
2024 (6) TMI 1175
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....and used for production of gasket for the buyers against purchase orders. The appellant had collected the cost of tools from the buyer-customers by raising excise invoices but the value of the same were neither included in the cost of production nor amortized for payment of duty on the final products manufactured by using such tools. After due process of law the learned Adjudicating Authority confirmed the demand for duty in terms of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 (CVR 2000)read with the proviso to Section 11A(1) of the Central Excise Act 1944, (C. Ex. Act) along with interest and equal penalty under Section 11AC of the C. Ex. Act, as shown in the Table below. TABLE Sl. No. Invoice No. & Date Supplier Name Description Value of tools in Rs. Duty Demanded in Rs. 1 8507/24.12.07 Cooper, Foundry, Satara Tools 2,00,000 32,960 2 9065/08.01.08 Cooper, Foundry, Satara Tools 1,10,000 18,128 3 566/25.04.08 Wapco TVS Tools ....
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....675 (Bombay) - Sakthi Sugars Vs. CCE (2008) 230 ELT 676 - CCE Vs. Sakthi Sugars (SC) - Ashok Iron Works Vs. CCE (2004) 168 ELT 198 - DCM Engineering Works Vs CCE (2010) 251 ELT 91 - Elcon Clipsal India Vs CCE (2002) 146 ELT 360 - Mutual Industries Limited & Jay CEE Auto Fab (P) Limited She prayed that the appeal may be allowed. 3.2 The learned AR has reiterated the points given in the impugned order. He referred to a similar matter clarified in Boards Circular No. 170/4/96-CX, dated 23/1/96 issued from file No. 6/14/94-CX.I wherein it was stated that the proportionate cost of pattern has to be included in the assessable value of the casting in cases when such patterns are being supplied by the buyers of the casting or are got prepared / manufactured by the job worker at the cost of the buyer. He has also taken us through this Tribunal's Final order No.40389/2023 dated 31/05/2023, in the case of M/s Best Cast IT Ltd Vs Commissioner of GST & Central Excise, (where one of us was a Member of the Bench) and stated that since an identical issue was decided by the said order in favour of Revenue, the appeal may be rejected. 4.....
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.... 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 sole consideration for the sale of the finished product. The other consideration is the value attributable to the use of the mould. In this view of the matter, we are not in a position to agree with the conclusions arrived at by West Zonal Bench, Mumbai in the three decisions referred to earlier. With respect we approve the decision rendered by this Tribunal in Flex Industries Ltd. case (supra)." The fact whether the tools were manufactured in the appellants factory or was outsourced by....
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.... with tool manufacturing within the factory of the premises of the appellant. Excise invoice were raised by mistakes since it was a standard format, therefore, the service provided falls out of the ambit of excise duty since service tax is discharged. We find that the issue again is not whether tax has been discharged, but whether the value of goods or services which has been paid for by the buyer and used for development of the buyers tools that has been further used by the appellant for the manufacture of the final product for the said buyer has been amortised. Amortisation is understood as an accounting method for spreading out the costs of an asset over the expected period the said asset will provide value. Amortizing the value of tools viz., jigs and fixtures, molds and dies will include amortizing its total monetary value (i.e. both of the tools manufactured and services rendered to the buyer for the manufacture of the tools). The cost incurred by the buyer in such cases would have to form part of the amortised cost of the final product (less the duty exemption eligible on the tools). The issue of double taxation is not a valid argument as has been discussed above. 7.1 The....