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2018 (7) TMI 683 - CESTAT KOLKATAValuation of manufactured goods, Conveyor Belts - inclusion of charges for drawing and engineering designing of conveyor belts in assessable value - The Department has been of view that the charges recovered by the appellant from their buyers should have formed the part of the assessable value under Section 4 of the Central Excise Act, 1944 as engineering designing and making drawing of same are intrinsic part of the manufacture of the product. Held that:- The assessable value of the manufactured products as provided under Section 4 of the Central Excise Act, 1944 includes all the cost elements which are prior to the clearance of the manufactured goods from the factory gate in the normal course of trade. In this case, since the engineering drawing and designing of the conveyor belts was to the specific requirements of each customer, for this purpose before undertaking manufacturing activity of conveyor belts, a detailed exercise were undertaken by the appellant with their customers/buyers to ascertain their requirements and then engineering drawing & design were made for manufacture of Custom made conveyor belts - such specific engineering design and drawing are pre-requisite for manufacturing the conveyor belts and therefore the value of such drawing and designs is intrinsic to the value of the product namely conveyor belts, manufactured by the appellant. Since these specific designs were pre-requisite for the manufacture and sale of their product ,therefore, the value of such engineering drawing and designing will certainly form the part of assessable value as provided under Section 4 of the Central Excise Act, 1944 - decided against assessee. Since the assessee has already taken service tax registration for the same activity and have been paying service tax, whether they need to pay Central Excise duty again on the same activity and whether the charges of suppression, mis-statement, fraud or mis-representation are invocable in this case for demanding duty under the extended time proviso of Section 11A(1) of the Central Excise Act, 1944 and whether the penalty under Section 11AC is also imposable on them? - Held that:- The tax under any statute is to be assessed and paid as per the requirement of that statute. Even though the assessee might have paid the tax wrongly under a different tax statute, it in fact does not satisfy the compliance of the statute under which the assessee is rightly required to pay his tax liability - the payment of service tax on the charges recovered from the buyer of engineering drawing & design is not a proper compliance of provisions of Central Excise Act, 1944 and thus short payment of central excise duty stands recoverable. Whether the provisions of Section 11A of Central Excise Act, 1944 demanding duty under the extended time proviso are invocable in this case or not? - Held that:- It is a matter of fact that the appellant is registered for service tax with the same department and is regularly filing their service tax return as well as service tax on the engineering drawing and designing service. Also, there is no element of mis-statement or suppression or fraud on the part of appellant with an intent to evade central excise duty - It is a matter of record that on the same service, the appellant have duly discharged the service tax liability and all the returns were before the Department and therefore in this case the elements required for invoking extended time proviso are not present and thus the extended time proviso under Section 11A of Central Excise Act, 1944 is not invocable. The matter remanded back to the original adjudicating authority for a limited purpose of calculation and confirmation of Central Excise duty for the normal period of one year as per the provisions of Section 11A of Central Excise Act, 1944 - decided partly in favor of assessee as regards extended period.
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