TaxTMI 
TaxTMI 
2025 (1) TMI 1436
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....24) Shri Rakesh Agarwal, Authorised Representative for the respondent. ORDER Challenge in the present appeals is to the Order-in-Original No.70-92-CE dated 29.03.2023 re-determining the valuation of the goods i.e. parts/components manufactured by the appellant in terms of Section 4(1)(b) of the Central Excise Act, 1944 read with Rules 6 and 11 of the Central Excise Valuation Rules, 2002 along with penalty. 2. Show cause notices were issued to 23 units by DGGI, Gurugram Zonal Units alleging that they had manufactured and cleared parts and components of motor vehicles to M/s. Maruti Suzuki India Ltd (M/s.MSIL), declaring the transaction value under Section 4(1)(a) of the Act, which appears to be incorrect as they received design/drawings....
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....ion), New Delhi. [Excise Appeal No.52419 of 2022 & Ors. Final Order No.55140-55337/2024 dated 12.03.2024] 6. Considering the decision of this Tribunal in Denso India Private Limited (supra), we find that the issue raised was whether the notional cost of specifications in the form of drawings and designs supplied free of cost by Maruti to the potential vendors should be included in the assessable value of the parts or components manufactured by the vendors and cleared to Maruti for their motor vehicles. To appreciate the issue the Principal Bench considered the provisions of Section 4 of the Central Excise Act and Rule 6 of the Central Excise Valuation Rules, 2000 and also distinguished the decision of the Tribunal in the case of Tata Motor....
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....ule 6 of the 2000 Valuation Rules could have been invoked in the facts and circumstances of the case as no additional consideration towards sale has been received by the appellant from Maruti. 31. A plain reading of clauses (ii) and (iv) of Explanation (1) to rule 6 of the 2000 Valuation Rules leaves no manner of doubt that only those specified goods and services are covered which are used in the production of goods in question or which are undertaken elsewhere than in the factory of production and necessary for the production of goods in question. 32. It is clear that the purpose behind rule 6 is to levy excise duty on all those expenses which are incurred by a buyer on behalf of the seller-manufacturer and relieves the seller-manufa....
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.... noted the distinction between the mere specification and detailed engineering drawing as considered by the Tribunal in the earlier decision in Mangalore Refinery & Petrochemicals Ltd. Vs. CC, Mangalore [2014 (313) ELT 353 (Tri.-Bang.)], where the Tribunal has held that there is a distinction between mere specifications and detailed engineering drawing. It is only the latter which is covered under rule 9(1)(b)(iv) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (which is now rule 10(1)(b)(iv) of the 2007 Customs Valuation Rules). The relevant portion of the decision of the Tribunal in Mangalore Refinery & Petrochemicals Ltd. vs. C.C., Mangalore (supra) is reproduced below: "9.3 When a person buys a pr....