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2012 (11) TMI 294 - CESTAT, MUMBAIExtended period of limitation - Demand of duty along with interest and equivalent amount of penalty – shortage of input - appellants are engaged in the manufacture of seats and other interiors required for vehicles of M/s Mahindra & Mahindra Ltd - M/s. Mahindra & Mahindra Ltd. had given tooling development cost, engineering and designing charges to the appellant – alleged that these costs were not amortized by the appellant in the assessable value of the seats and other parts manufactured by them - he also received certain inputs free of cost and its value was not considered by the appellant for the purpose of determining assessable value - appellant had also written off modvatable inputs totally from the stock without reversing MODVAT/CENVAT credit pertaining to such inputs. Held that:- Extended period of time has been correctly invoked to demand ineligible cenvat credit taken in respect of inputs found short and which have been written off in the books of accounts – amount of tooling advance received by the appellant from M/s Mahindra & Mahindra is includible in the assessable value of the goods supplied to them in terms of Section 4(3)(d) of the Central Excise Act itself. Merely because, the demand has been confirmed under rule 11 read with section 4 (3) (d), it does not become infructuous. Value of inputs received free of cost by the appellant from M/s Mahindra & Mahindra is required to be included in the assessable value of goods supplied to them and the extended period for demand of differential duty has been rightly invoked. Extended period of time has been correctly invoked to demand ineligible cenvat credit taken in respect of inputs found short, which have been written off in the books of accounts.
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