Custom, Excise & Service Tax Tribunal
C.C.E. Delhi Iv vs Esko Die Castings Pvt. Ltd. (Unit-Iii) on 11 July, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH - 160 017
DIVISION BENCH
COURT NO. I
APPEAL NOs. E/2216-2217/2011-EX[DB]
[Arising out of Order-in-Appeal Nos. 36-37/Appl/DLH-IV/2011 dated
03.05.2010 passed by the Commissioner of Central Excise (Appeals),
Delhi-I]
Date of hearing/decision: 11.07.2018
For approval and signature:
Hon'ble Mr. Ashok Jindal, Member (Judicial)
Hon'ble Mr. Devender Singh, Member (Technical)
CCE, Delhi-IV : Appellant(s)
VS
Esco Die Castings Pvt. Ltd. (Unit-III) : Respondent(s)
Appearance:
Present for the Appellant(s): Sh. Bhasha Ram, A.R. Present for the Respondent(s): Sh. N.K. Sharma, Advocate CORAM:
Hon'ble Mr. Ashok Jindal, Member (Judicial) Hon'ble Mr. Devender Singh, Member (Technical) FINAL ORDER NO. 62543-62544/2018 Per : Ashok Jindal The Revenue is in appeal against the impugned orders.
2. Brief facts of the case are that the respondent is manufacturing LED lights on job work basis and supplies the same to the M/s Philips Electronics Ltd. The principal manufacturer supplies moulds and dies to the respondent free of cost and the respondent after manufacturing the goods, paid the duty on the said goods after 2 E/2216-2217/2011-EX[DB] adding 10% on the basis of the cost + amortized cost of moulds and dies. The respondent is not charging amortized cost from their principal manufacturer, therefore the same is deducted from the amount payable by the principal manufacturer. The case of the Revenue is that as the respondent, after including the amortized cost in the assessable value, has reduced simultaneously the same from the payment received from the buyer, in these circumstances, amortization cost has not been included in the assessable value. Therefore, the respondent is liable to pay the duty on amortized cost of moulds and dies which has been received free of cost from the principal manufacturer. In these sets of fact, various show cause notices were issued to the respondent to demand duty on amortized cost on moulds and die supplied free of cost to the respondent along with interest and to impose penalties. The matter was adjudicated and the demand of duty was confirmed along with interest and penalties were also imposed. Those orders were challenged before the Ld. Commissioner (Appeals), who examined the issue and hold that the respondent has paid duty on amortization cost; therefore, the proceedings were dropped by setting aside the adjudication orders. Aggrieved from the same, the Revenue is before us.
3. Ld. A.R. submits that as the respondent has not recovered amortized cost from the principal manufacturer, therefore they are required to pay duty thereon.
4. Heard the parties and perused the record.
5. On perusal of the sample invoice provided before us by the Ld. Advocate for the respondent which is extracted herein below for better appropriation to the facts of the case:
3 E/2216-2217/2011-EX[DB]
6. On going through the said invoice, we find that the respondent has paid the duty on the assessable value i.e. Rs.39168/- (cost) + Rs.3917/- (10% of cost) + Rs.2550/- (amortized cost). The duty on these amounts works out to 4 E/2216-2217/2011-EX[DB] Rs.7302/-. Thereafter, the respondent has deducted the amortization charges not to be recovered from the buyer. From the invoice, it is clear that on the amortized cost, the respondent has already paid the duty; therefore, they complied with the conditions to the Board Circular No. 170/4/96-CX dt. 23.01.1996. The Revenue has misunderstood the issue by holding that as amortization cost has not been recovered from the buyer, therefore the respondent is liable to pay the duty. Admittedly, as per the invoice extracted herein above, the respondent has paid duty on amortization cost, therefore no proceedings were required to be initiated against the respondent. Moreover, the Revenue is concerned about the assessable value of the goods, on which the duty is to be paid. If some part of the assessable value has not been recovered, that does not mean that the assessee has not paid duty thereon. It is a case of totally misunderstanding of the concept of "assessable value" or "amount recovered from the buyer". In fact, the duty is payable on assessable value whereas the Revenue has misunderstood the amount recovered is assessable value. The Ld. Commissioner (Appeals) has examined the issue. If the committee of Commissioners, who had recommended to file appeals against the impugned order, have seen the invoices and analyzed the same, no appeals were required to be filed against the impugned orders. The Ld. Commissioner (Appeals) has examined the issue in detailed and hold that the respondent has paid duty on amortization cost, which is a fact on record.
5 E/2216-2217/2011-EX[DB]
7. In view of the above analysis, we do not find any infirmity with the orders of the Commissioner (Appeals). Accordingly, the same are upheld.
8. In the result, appeals filed by the Revenue are dismissed.
(Dictated and pronounced in the court)
(Devender Singh) (Ashok Jindal)
Member (Technical) Member (Judicial)
RAS'