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2016 (3) TMI 435 - AT - Central ExciseMounting charges inclusion in the assessable value of the bodies - demand of duty in respect of the bodies which were being cleared by them after being mounted on the chassis on the ground that the mounting activity is part and parcel of the manufacturing activity in terms of the provisions of Chapter Note 3 of Chapter 87 and as such the mounting charges are required to be included in the assessable value of the bodies Held that:- The Revenue was happily accepting the same and at no point of time any objection was raised. The manufacturing as also the mounting was being done by the appellant, under two purchase orders, Revenue, probably, was also under the bonafide impression that mounting charges are not required to be added in the assessable value of their final product and as such was accepting the appellant's style of payment of central excise duty and service tax. The extended period of limitation, is available to the Revenue only when an assessee acts with a malafide intention and there is a positive suppression or misstatement by him with an intention to evade payment of duty. Otherwise also, we note that the appellant was working under a job work Notification No. 214/86 in which case there would be no duty liability on the assessee if the procedure as envisaged under the said Notification is duly followed by them. However, having paid the duty on the value of the bodies only and having paid the service tax on the mounting charges, it cannot be said that the appellant was guilty of any malafide. The duty so paid by the appellant was available as credit to its principal customers i.e. M/s Volvo India Ltd., who were in a position to use the same for payment of tax on their final product, The entire exercise seems to be revenue neutral. In view of our foregoing discussion, we agree with the appellant’s stand a part of the demand out of the total period April 2002 to July 2005 shall be barred by limitation. Accordingly we hold so. However a part of the demand would fall within the limitation period for which the matter is being remanded to the original adjudicating authority for quantification of the same. While judging the appellant's liability to pay the central excise duty, the benefit of the service tax already discharged by them would be given to them and their liability would be neutralized to that extent. As we have already held that there is no malafide on the part of the appellant, we find no reason to impose penalty on them. - Decided in favour of assessee
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