2015 (11) TMI 1099 - AT - Central Excise

Valuation - inclusion of amortized cost of moulds - inclusion of interest element to the assessable value - inclusion of insurance clearing and forwarding and transportation cost - Held that - so far as allegation of non inclusion of insurance clearing and forwarding and transportation cost is concerned the adjudication proceeding was finally heard on 22.12.2004. Thereafter on 15.6.2005 report of chartered accountant was obtained by the Commissioner contending that CVD and C&F transportation from port to buyer s premises had not been included in the cost of moulds and dies. Non inclusion thereof gave rise to demand of Rs. 37, 466/-. It is difficult to agree with the learned adjudicating authority on such demand since report from Chartered Accountant was obtained after hearing was concluded and not confronted to the appellant for rebuttal. - Law being well settled there should be inclusion of amortized cost. No doubt appellant has waited for larger bench decision but that does not alter the law. Therefore demand of Rs. 5, 39, 775/- is confirmed. - adjudication has travelled and time has also been crossed due to difference in the decisions of the Tribunal there shall not be levy of penalty on the appellant in respect of duty demand of Rs. 5, 39, 775/-. Upon re-adjudication penalty if any leviable against demand of Rs. 11, 88, 368/- shall be considered by the ld.Adjudicating Authority. - Decided partly in favour of assessee.

Summary

Issues:
1. Allegation of non-inclusion of amortized cost of moulds
2. Allegation of non-inclusion of interest element in the assessable value
3. Allegation of non-inclusion of insurance, clearing, and forwarding, and transportation cost

Analysis:
1. The appellant contested a demand of Rs. 17,65,609, comprising various allegations. Regarding the non-inclusion of insurance, clearing, and forwarding, and transportation cost, it was argued that a report from a chartered accountant was obtained after the conclusion of the hearing and not presented for rebuttal. The Tribunal agreed that the demand of Rs. 37,466 was not valid due to lack of opportunity for rebuttal, thus allowing the appeal on this count.

2. Concerning the demand related to the non-inclusion of the interest element in the assessable value, the appellant claimed that the interest element was already included. The Tribunal noted that the authority did not examine invoices or provide a hearing opportunity. The case was remanded for a fair hearing to resolve the issue in accordance with the law.

3. The appellant argued that a larger bench decision mandated the inclusion of amortized cost from 1997-98 to June 2000 in the assessable value. Despite waiting for the decision, the law remained unchanged, leading to the confirmation of the demand of Rs. 5,39,775. No penalty was imposed for this demand due to the prolonged adjudication process.

4. The Tribunal decided not to levy a penalty for the demand related to the inclusion of amortized cost. Any penalty for the demand of Rs. 11,88,368 was left to the adjudicating authority after re-examination. The interest element demand was upheld without hesitation, and the appeal was partly allowed, with certain aspects remanded for further consideration and decision.