TaxTMI 
TaxTMI 
2024 (6) TMI 1175
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....ket and Rubber Gaskets falling under Chapter Heading 7616000 and 40169340 of the Central Excise Tariff Act 1985. During the period from December 2007 to November 2009, the appellant had manufactured gaskets for their customers by using tools viz., jigs and fixtures, molds and dies paid for by their customers, i.e. tools supplied free of charge by the buyer. The tools were manufactured by the appellant 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....
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....were retained by the appellant in their factory for further manufacture of excisable goods cleared on payment of duty. The appellant is eligible for the benefit of Notification No.67/95-CE dated 16.03.1995. The tools were manufactured within the factory and the same had been used in relation to manufacture of final products. As per Central Excise (Valuation) Rules, 2000, the cost of the Tools has to be amortized and proportionate value has to be added in the transaction value. The appellant had paid duty on the amortized cost and raised Central Excise invoice showing full cost of the tools and had discharged duty on the said amortized value on one time basis. The appropriate duty will have to be discharged only at the time of clearance to T....
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.... 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. The issue relating to invoice 1, 2, 3 and 4 as to whether the cost of tools supplied by the buyer free of charge back to the appellant, should be included as an amortised cost, when the said tools are used in the appellants factory for manufacture of components for the said buyers, in terms of Rule 6 of CVR 2000 or not, has been examined by this Tribunal in M/s Best Cast IT Ltd (supra) after considering the judgements of C....
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.... 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....
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.... the appellant pays central excise duty first on the tools, viz., jigs and fixtures, molds and dies which are capital goods as defined in CENVAT Credit Rules, 2004 manufactured by them for the buyers. Subsequently duty is paid on the final products (gaskets), manufactured by using the capital goods. Both are two separate set of excisable goods. Had they purchased the tools from the market its price would have automatically entered the price of the final product sold by them. Hence the question of double taxation does not arise. 6. The appellant has stated that they are eligible for the benefit of Notification No.67/95 - CE dated 16.03.1995 for the tools captively manufactured for the buyer and used in their factory for the manufacture of f....
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....t 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 ....