TMI Blog1998 (8) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Rules, 1944. 2. The facts as stated in the memorandum of appeal can be summarised as follows. Appellant owns a printing press and has been printing various flexible laminates used as packaging material for food and other allied products manufactured by customers of the appellant. The motifs and pictorial representations of the products of the Customers are printed by the appellant in the printing press using printing cylinders which are manufactured by M/s. Helio Gravure, a Division of the appellant - Company and located in the same premises though operating with a separate Central Excise licence. M/s. Helio Gravure produces printing cylinders according to specifications of customers who desired printing to be done on laminates. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g imposition of penalty. Though appellant resisted the notice, the Collector passed the impugned order. 4. Learned Counsel at the outset stated that in view of the decision of the Tribunal in Flex Industries Ltd. v. Commissioner of Central Excise, Meerut - 1997 (91) E.L.T. 120 (Tribunal), appellant desires to change the factual stand taken hitherto. The statement can be understood in the light of the facts which we proceed to indicate hereinafter. The show cause notice specifically alleged that the expenses on the manufacture of printing cylinders were recovered separately under separate invoices in debit notes from the buyers of the packaging materials and these expenses would be part of the assessable value of the packaging materials. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s raised in the reply are seen reflected correctly in the impugned order. Reference is made to the reply at pages 3 4 of the order. Appellant stated in the reply that cylinders are manufactured by the sister concern M/s. Helio Gravure, that cylinders incorporating the motifs and designs of the customers are used merely as consumables and not as inputs in the manufacture of the final product, that the cylinders are used only as appliances and not inputs. Service charges are apportioned to the manufacturing expenses of cylinders manufactured by the sister concern. If the charges are apportioned to the value of the excisable products, the same are to be added to the value of cylinders and since cylinders are exempt, additional value shall ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly contradicts the stand taken before the lower authority. No materials are also placed before us in support of the present stand. In these circumstances, it follows that the amounts collected under separate invoices represented, as admitted before the Adjudicating Authority, a part of the cost of printing cylinders namely, the price paid for etching, the art work and motifs on the cylinders. There is no dispute that without the use of printing cylinders containing etched motifs and art work specified by the customer, the final product manufactured by the appellant cannot come into existence. 7. It is true that one of the officers stated in the course of investigation that the charges collected were for service charges but, he could not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished products, the cost of cylinders must be reflected in the assessable value of the final product by amortising the cost. The present appellant had no case before the Adjudicating Authority that the cost of cylinders had been amortized to any extent. Whether the amount collected as service charges represented notional cost of the cylinders of etching or the cost of maintenance of cylinders, such charges would be includible in the assessable value. 9. According to Shri A.K. Patnaik, representing the appellant, the show cause notice was defective. He has taken us through all the averments in the show cause notice and we are unable to see any defect in the show cause notice. According to him notice did not proceed on the basis that any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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