Custom, Excise & Service Tax Tribunal
Cce Trichy vs Cethar Vessels (P) Ltd on 6 June, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal Nos. E/467/04 & E/756/04
[Arising out of Order-in-Appeal No.360/2003-TRY (ADK) dt. 8.12.2003 passed by Commissioner of Customs & Central Excise (Appeals), Tiruchirapalli and Order-in-Original No.4/2004 dt. 27.2.2004 passed by the Commissioner of Central Excise, Tiruchirapalli respectively]
1. CCE Trichy
2. Cethar Vessels (P) Ltd.
Appellant/s
Versus
1. Cethar Vessels (P) Ltd.
2. CCE Trichy
Respondent/s
Appearance :
Shri R.Raghavan, Advocate Shri V.V. Hariharan, JCDR For the Assessee/s For the Revenue/s CORAM:
Dr. Chittaranjan Satapathy, Honble Technical Member Mr. D.N. Panda, Honble Judicial Member Date of hearing : 6.6.2012 Date of decision : 6.6.2012 Final Order No.____________ Per Dr. Chittaranjan Satapathy Heard both sides. The appellant-assessee is manufacturing and supplying boiler systems. According to learned advocate, some of the components are manufactured by the assessee whereas some components are bought out items which have been supplied as a part of the contract. They have also collected drawing and design charges from their clients over and above the value of the manufactured and bought out components supplied by them. In both the cases, the department proposed to include the charges as part of the assessable value of the manufactured components and charge duty on the same.
2. In respect of Appeal No.E/467/04, the original authority demanded duty including the entire value of drawing and designing charges. This relates to the period 1990-94. The lower appellate authority has dropped the demand in favour of the assessee leading to this appeal by the department.
3. In respect of Appeal No.E/756/04, which relates to the period 1991-96, the adjudicating Commissioner has dealt with 10 contracts out of which the assessee has filed appeal only in respect of 5 contracts. In respect of these contracts, he has apportioned the drawing and design charges between the manufactured components and bought out components and has only included that portion relating to the manufactured items for calculation of the duty. The appellant-asseessee are not aggrieved by the apportionment of the drawing and design charges in the proportion of the value of the manufactured and bought out components. Their grievance in the appeal against the adjudicating Commissioners order is that he has ignored receipt of the part of the drawing and design charges which is on account of general drawing and design of the plant etc. in the clients premises and which does not relate to the components manufactured and supplied. Their grievance is more particularly crystallized in grounds of appeal No.6.
4. Learned advocate appearing for the appellant-assessee states that though they have got total relief from the lower appellate authority in Appeal No.E/467/04, they are willing to pay duty on additional value if the same is determined in respect of 8 contracts involved in that case apportioning the value of drawing and design charges in the ratio of value of manufactured components and value of bought out components. However, he seeks relief in that case also in respect of the general drawing and designing charges relating to the plants of the customers which are not relatable to the supply of goods.
5. Learned JCDR is also agreeable to working out the duty liability apportioning the drawing and designing charges in the ratio of value of manufactured items and bought out items in view of the grounds of appeal advanced by the department. He also agrees that as regards the general drawing and designing charges relatable to the plants of the customers and not to supply of materials, there is no finding in the adjudicating Commissioners order. The lower appellate authority in Appeal No.E/467/04 has also not gone into this question but has granted total relief to the respondent-assessee in that case. Both sides agree that these two appeals are pending for a long time and relate to supply of goods which has taken place about 20 years back. Both sides agree that the matter requires to be resolved satisfactorily. Hence a proposal has been made before the Bench that the entire drawing and designing charges involved in the 8 contracts in the departments appeal and 5 contracts involved in the assessee-appellants appeal can be apportioned in the ratio of 50 : 50 towards general drawing and designing charges in respect of the plant of the customers, and drawing and designing charges attributable towards both manufactured and bought out components, the latter can be further divided in the ratio of the value of manufactured components and bought out components as has been done in respect of the assessee-appellants appeal by the adjudicating Commissioner himself.
6. With a view to give a finality to these disputes pending over two decades, we find that the suggestion coming from both the sides is acceptable. Accordingly, we set aside the impugned order in Appeal No.E/467/04 and modify the impugned order in Appeal No.E/756/04 and remand the matter to the original authority in each case for the limited purpose of determining the duty liability on the value of drawing and designing charges in respect of the manufactured components after allowing 50% abatement towards general drawing and designing charges as indicated above which does not relate to the supply of components. We make it clear that our order as above is applicable in respect of 8 contracts involved in Appeal No.E/467/04 and in respect of only 5 disputed contracts in respect of Appeal No.E/756/04. The penalty imposed under the impugned order in Appeal No.E/756/04 is for a nominal amount and the same is confirmed.
7. Both the appeals are allowed in the above terms.
(Dictated and pronounced in open court)
(D.N. PANDA) (DR. CHITTARANJAN SATAPATHY)
JUDICIAL MEMBER TECHNICAL MEMBER
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