TaxTMI 
TaxTMI 
2024 (8) TMI 9
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....to the principal manufacturer on payment of duty. The materials supplied free of cost to the appellant by the principal manufacturer are Cenvat availed components which are sent under job work challans in terms of Rule 4 (5) (a) of Cenvat Credit Rules 2004. 3. While paying the central excise duty, the appellant did not include the cost of free supply materials in the assessable value. The department was of the view that the cost of free supply materials has to be included in the assessable value of goods in terms of Rule 10 (A) (iii) of Central Excise Valuation Rules 2000, read with Rule 6 of the said Rules. The free supply materials are to be treated as additional consideration which to be added to the transaction value. Show cause notice for the different periods from April 2007 to July 2010, (duty Rs.3,60,087/-) and August 2010 to July 2011 (duty Rs.1,10,205/-) was issued to the appellant proposing to demand the duty along with interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalties. On appeal, the Commissioner (Appeals) upheld the same. Hence, these appeals. 4. The Ld. Counsel G. Natarajan,....
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....ts which have been supplied after job work. In the present case, the principal manufacturer is not selling the wiring harness cleared by the appellant, but is captively consuming them for further manufacture. The free supplies given to the appellant cannot be considered as an additional consideration. It is also to be noted that the principal manufacturer has availed cenvat credit of the material supply to the appellant whereas the appellant has not availed credit of duty of such free supplied raw materials. It cannot be considered as an additional consideration. 7. The Ld. Counsel relied upon the decision of the Tribunal in the case of Rolastar Pvt Ltd Versus CCE 2012 (276) ELT 87 Tribunal Ahmadabad, which has been affirmed by the Hon'ble Apex Court as reported in 2013 (298) ELT A 186 Supreme Court. 8. The Ld. Counsel argued on the grounds of limitation also. It is submitted that the demand from April 2007 to January 2010 is raised by way of invocation of extended period. It is alleged by the department that the appellant has suppressed facts with intention to evade payment of duty. The entire figures have been taken from the accounts maintained by the appellant. The appella....
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.... Rules, 2002 and which resulted in short payment of duty. It is submitted that the confirmation of duty demand with interest and penalties imposed are legal and proper. The Ld. AR prayed that the appeals may be dismissed. 10. Heard both sides. 11. The issue that arises for consideration is whether the demand of duty raised invoking Rule 10A (iii) read with Rule 6 of Central Excise Valuation Rules, 2000 alleging that the value of goods supplied free of cost by the principal manufacturer has to be included to arrive at the assessable value (transaction value) is legal and proper. Rule 10A reads as under: - RULE 10A. Where the excisable goods are produced or manufactured by a job-worker, on behalf of a person (hereinafter referred to as principal manufacturer), then.- (i) in a case where the goods are sold by the principal manufacturer for delivery at the time of removal of goods from the factory of job worker, where the principal manufacturer and the buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the transaction value of the said goods sold by the principal manufacturer; (ii....
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.... circumstances specified in clause a of subsection 1 of section 4 of the Act except the circumstances where the price is not the sole consideration for sale, the value of such goods shall be deemed to be the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assesser". 12. After the introduction of Rule 10 A, the practice of discharging the duty on cost construction method by the Job Worker is not applicable. The provisions under Rule 10 A of Central Excise Valuation (Determination of Price of excisable goods), Rules 2000 has to be applied. In the present case, the Cenvated raw materials have been supplied free of cost to the appellant by the principal manufacturer. However, while clearing the wiring harness, the appellant has not included the value of these free materials in the assessable value. The department has thus construed that price is not the sole consideration for sale of the wiring harness by the Job Worker to the principal manufacturer. The value of the free materials has not been included in the assessable value while clearing the goods to the principal manufacturer,....