Custom, Excise & Service Tax Tribunal
M/S. Supangita Engineers Pvt. Ltd vs Cce, Bangalore on 5 April, 2013
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing:05/04/2013
Date of decision:05/04/2013
Appeal No.E/182-183/2004
(Arising out of Order-in-Appeal No.363/2003-CE dt. 21/11/2003 & No.391/2003-CE dt. 31/12/2003 passed by
CCE(Appeals), Bangalore )
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
Honble Mr. B.S.V. Murthy, Member(Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Supangita Engineers Pvt. Ltd.
..Appellant(s)
Vs.
CCE, Bangalore
..Respondent(s)
Appearance Mr. S. Srirangam, Advocate for the appellant.
Mr. N. Jagdish, Superintendent(AR) for the respondent.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) Honble Mr. B.S.V. Murthy, Member(Technical) FINAL ORDER No._______________________ [Order per: B.S.V. Murthy] The appellant is engaged in the manufacture of castings. Some of the purchasers supplied tools which were used for the manufacture of castings by the appellant. The Department took up the issue of inclusion of amortized value of tools in the cost of castings manufactured by the appellant when the Range Officer wrote a letter to the appellant in September, 1999. In response to the letter, the appellant produced cost sheets. However, subsequently an amount of Rs.34,535/- towards the duty in respect of non-amortized value of tools was paid by the appellant under protest. For the subsequent period also, another amount of Rs.86,621/- was also paid. Both these amounts were paid under protest and appellant filed refund claims thereafter. The ground for claim of refund was that duty had already been paid on the amortized value and, therefore, they are eligible for the refund. Both the refund claims were rejected and hence the appeals.
2. The learned advocate on behalf of the appellant submitted that the appellant had produced certificate from Cost Accountants which showed that the amortized value had already been included and duty had already been paid. He also relied upon the Valuation Instruction No.1/96 dt. 03/03/1996 issued by the Commissioner of Central Excise, Bangalore to submit that for the purpose of determination of amortized value of tools/patterns, a Cost Accountants certificate is required to be produced. He submits that the appellant was forced to make the payments of duties which they made under protest and since they had already included the amortized value as evidenced by the cost sheets certified by Cost Accountant submitted by them, the duty has been paid by them and they are eligible for the refund.
3. After hearing both sides, we find that in this case, the payment of duty was being made by the appellant on the basis of transaction value between the purchasers and the appellant. There is absolutely no evidence produced in the form of any understanding or agreement or any other evidence to show that the purchasers were informed that cost of tools amortized over the life of tools in respect of the castings is to be included in the value and there is also no indication to show that the appellant had informed their purchasers that they had made such inclusion. The obvious conclusion in such cases would be that the transaction value did not include the cost of tools which were supplied free of cost by the purchasers. As regards the cost sheets submitted, it is noticed that in the cost sheets submitted with the memorandum of appeal (which is filed for one year viz. 1998-99), the appellant has shown a profit margin of 4.46% in respect of the products manufactured by them and in all these case the amortized cost included is much less than the total profit earned. The cost sheets thus do not help anyone to understand whether both the parties to the transaction had come to an understanding that amortized cost is required to be included. When the profit margin is sufficient, it is always possible to show that amortized cost had been included which can be done by adjusting within the profit margin. In such a situation we are unable to accept the submission that the cost sheets are sufficient as evidence for this purpose. Further, we also find that in para 9.5 of the Order-in-Original dt. 28/05/2003 passed by the Deputy Commissioner, he has observed that during the visit of audit in the month of August/September 2002, the same issue was pointed out by the audit party to the appellant and on being pointed out, the appellant had paid an amount of Rs.11,150/- being the duty on amortized tool cost for further period from April 2002 to September 2002. A specific query was made by the Bench to the learned counsel as to whether this payment was made under protest or any refund claim has been made. We did not get any specific response to this. Therefore, the Deputy Commissioners conclusion that this amount was paid and no refund was claimed and this would be one of the evidences to show that the amortized cost was not included earlier has to be accepted. Under these circumstances, we find that the appellant has not been able to make out any case in their favour and accordingly both the appeals are rejected.
(Pronounced and dictated in open court) (B.S.V. MURTHY) MEMBER (TECHNICAL) ( P.G. CHACKO ) MEMBER (JUDICIAL) Nr 5