TaxTMI 
TaxTMI 
2025 (6) TMI 759
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....ommissionerate (impugned order). 2. Brief facts of the case are that the Appellant is engaged in the manufacture of automobile parts falling under Chapter Sub-heading 87089900 of the CETA, 1985. During the course of verification of financial documents, it was observed that the Appellant had received an amount of Rs.104,70,79,627/- as 'tooling advances' for the period from 2012 - 13, 2013 - 14 and 2014 - 15 from their customer M/s. Ford India Ltd. It appeared to the department that the Appellant had to pay excise duty on the tooling advances received from the customers. It was also observed that the Appellant had raised VAT invoices to M/s. Ford India Ltd. for sale of tools for the period from 2012 - 13, 2013 - 14 and 2014 - 2015 which ap....
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....ther set of tools is manufactured by its subcontractors and used in their respective factories for manufacture and supplying components directly to the customers or to the appellant. The value of these tools are billed by the subcontractors to the appellant who in turn bills the customers after adding a margin thereon. b) The value of tools manufactured by the appellant and used within its factory is considered for amortization over automobile components supplied to customers for paying duty thereon. c) The contractors amortise the value of tools used in their factory over the automobile components supplied by them for discharging applicable duty of central excise. The appellant in turn would a mortise the value of these t....
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....on trading activity. h) As per explanation 1(c) to rule 6 of CENVAT Credit Rules 2004 value for the purpose of sub rules (3) and (3A), in case of trading shall be the difference between the sale price and the cost of goods sold (determined as per the generally accepted accounting principles without including the expenses incurred towards their purchase) or 10% of the cost of goods sold whichever is more. i) The margin on trading for the purpose of CENVAT reversal would have to be re-computed based on actual sale value of tools used by the subcontractor and subsequently billed by the appellant on the customer as well as actual cost of those tools based on billing by subcontractor to the appellant. This would give the correc....
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....rated the points given in the OIO and prayed that the appeal may be rejected. 4. We have heard the parties and have carefully perused the appeal memorandum and connected documents. We find that the billing of tools manufactured by the sub-contractors for the appellants customers and billed on them (customers) by the appellant after adding a margin, has been accepted as a trading activity. The dispute pertains to; A) Value of tools to be adopted needs to be re-worked out as per explanation 1(c) to rule 6(3A) of CENVAT Credit Rules 2004. B) Since the dispute involved a bona fide mistake in interpreting law rather than tantamounting to wilful suppression, the extended period of demand and penalty may be dropped. 5. We f....
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.... the matter may be remanded to Original Authority for verifying the issues and taking a decision afresh. 7. Further the appellant has stated that this trading margin amount collected had also been amortised. If if found true and in the absence of any other charge of a blame worthy conduct, the act though incorrect, can be taken as a reasonable cause for non-compliance with the rule and not a case of deliberate suppression of fact / deception, thereby not attracting the larger period for demand of duty and imposition of penalty. If not, it is a case of deception to be dealt with accordingly. 8. We hence do not answer the questions of time bar and penalty at this stage, since the facts have not been examined by the Original Authority bu....