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2015 (7) TMI 584 - CESTAT NEW DELHI

2015 (7) TMI 584 - CESTAT NEW DELHI - TMI - Valuation of goods - clearance of fresh manufactured goods and goods after reprocessing - inclusion of amortizing cost of moulding - Credit had been taken under Rule 16 of the Central Excise Rules, 2002 in respect of the consignments of plastic moulded furniture returned from the distributor for being re-made / re-manufactured - Held that:- It is seen that this statement of Shri G.M. Bhandari is not corroborated any other evidence and not only this, wh .....

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em which had not manufactured and cleared by the appellant on payment of duty. In view of this, the CENVAT Credit demand of ₹ 6,61,719/- along with interest and equivalent penalty is not sustainable.

As regards the dispute regarding including the amortized cost of moulds in the assessable value of the goods, the appellant themselves conceded that the same would be includible. However, the dispute in this regard is over the method of calculation. In our view, the amortized cost m .....

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he rest of the demand on this count is set aside.

Re-moulding charges are for the expenses incurred for re-processing and re-manufacturing of the goods and the same cannot be treated as consideration for the goods earlier cleared on sale. In view of this, we hold re-moulding charges are not includible in the assessable value and as such the duty demand of ₹ 1,73,427/-along with interest and equivalent penalty is not sustainable. - only duty/CENVAT Credit demand of ₹ 54096/ .....

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Pvt. Ltd. (hereinafter referred to as PPPL) are manufacturers of plastic moulded furniture chargeable to Central Excise Duty under Chapter 94 of the Central Excise Tariff and articles of plastic chargeable to Central Excise under chapter 39 of the Tariff. Shri K.K. Maheshwari is the Director of PPPL. 2. On 20/7/2002, the factory PPPL was visited by the Jurisdictional Central Excise Officer and at that time, they found the stock of some defective furniture in respect of which they had taken CENV .....

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icated that the same had been manufactured in 1999 while the factory had started production in February, 2001. At that time, Shri K.K. Maheshwari, Director of the appellant company was called and enquiry was made with him. Shri K.K. Maheshwari at that time accepted that the description of the goods claimed to be returned goods does not match with the description on the invoices and accordingly he reversed the credit of ₹ 51160/-. 3. Thereafter, enquiry was made with Shri G. M. Bhandari, Ac .....

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is of this statement, the Jurisdictional Central Excise Officers were of the view that in past also, the appellant company - PPPL have wrongly taken the CENVAT Credit under Rule 16 of the Central Excise Rules, 2002 in respect of the goods which in their records are shown to have been received as "returned/defective goods for being re-made or re-manufactured". The CENVAT Credit demand of ₹ 7,17,879/- is on this basis out of which the amount of ₹ 51,160/- has already been rev .....

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in the assessable value. The duty demand of ₹ 1,73,427/- for the period from 1/4/2001 to 31/7/2002 is on this basis. 5. In some cases, the appellant company, PPPL were making plastic moulded furniture for their buyers by using the moulds supplied by them free of charges. At that time, they did not include the amortized cost of mould. The duty demand of ₹ 7464/- is on this basis. 6. It is in view of the above that the Joint Commissioner, Central Excise, Jaipur-I vide order-in-original .....

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er of the Joint Commissioner, the same were dismissed vide order-in-appeal dated 18/4/2005. 8. Against the above order of the Commissioner (appeals) these 2 appeals have been filed by the appellant. 9. Heard both the sides. 10. Shri O.P. Aggarwal, Chartered Accountant, ld. Counsel for the appellant, stated that so far as the inclusion of amortized cost of moulds is concerned, he agrees that the amortized cost of the mould is includible. He, however, stated that the amortized cost of mould should .....

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urniture under Rule 16 for being re-made, he stated that the department in this regard relies only on the statement dated 23/7/2002 of Shri G.M. Bhandari, Manager of M/s. Wim Plast Limited their distributor; that Shri K.K. Maheshwari, Director of the appellant company has not been confronted with this statement when his statement was recorded; that the statement of Shri Harinder Kumar Garg, Manager of the appellant company had been recorded on 27/08/2002 and he was also not confronted with the s .....

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iption of the returned goods under Rule 16 was not matching with the invoices, it cannot be presumed that this was so during t he previous period also. With regard to the inclusion of re-moulding charges on the assessment value, Shri O.P. Aggarwal, stated that the same is not an additional consideration for the goods sold but is an amount charged for the expenses incurred by the appellant on re-manufacturing and hence re-moulding charges are not includible in the assessment value of the goods. S .....

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ds, Shri Yashpal Sharma, stated that from the statement dated 23/7/2002 of Shri G.M. Bhandari it is clear that in past also, the old and used furniture were being sent back under Rule 16 as defective/returned goods for being re-made/re-manufactured and that this is also clear from the fact that on the date of officers' visit to the factory on 20/07/2002 while the appellant had taken CENVAT Credit of ₹ 51,160/- in respect of a consignment of "returned/defective goods" received .....

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m 1/4/2001 to 31/7/2002. This CENVAT Credit had been taken under Rule 16 of the Central Excise Rules, 2002 in respect of the consignments of plastic moulded furniture returned from the distributor for being re-made / re-manufactured on the ground that the same were defective. This amount includes the CENVAT Credit of ₹ 51,160/- in respect of one such consignment which was found by the officers at the time of their visit to the factory on 20/7/2002 and in respect of which the description of .....

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factory had not come into existence and had not started production. In view of this the CENVAT Credit duty demand of ₹ 51,160/- has to be upheld. This amount has already been paid by the appellant. As regards the CENVAT Credit demand of the balance amount of ₹ 6,66,719/-, this demand is in respect of the consignment of defective plastic moulded furniture received in past and this CENVAT Credit had been taken under Rule 16 of the Central Excise Rules, 2002. The department's conte .....

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orded they were also not confronted with this statement. In view of this we hold that merely on the basis of statement dated 23/07/2002 of Shri G.M. Bhandari, it cannot be presumed that in past also, the appellant had taken CENVAT Credit under Rule 16 of the Central Excise Rules, 2002 in respect of the old and used plastic furniture received by them which had not manufactured and cleared by the appellant on payment of duty. In view of this, the CENVAT Credit demand of ₹ 6,61,719/- along wi .....

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