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M/s. HMM Coaches Limited Versus CCE, Panchkula

Extended period of limitation - charge of suppression - Held that:- Nothing was asked from the appellant. Only on 8.4.2008, first time the sale invoice of the chassis manufacturer was asked from the appellant as the same was not in possession of the appellant, the appellant showed their inability to provide the same and thereafter they summoned to the chassis manufacturer to provide such details which were provided. As the sale invoice of the chassis manufacturer was not in possession of the app .....

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ided in favour of assessee - E/Misc/50101/2015 in Appeal No.3301/2009-EX(DB) - Final Order No. 52865/2015 - Dated:- 7-9-2015 - SHRI ASHOK JINDAL, MEMBER (JUDICIAL) AND SHRI B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri B.L. Narsimhan, Advocate For the Respondent : Shri Nanthuk, JCDR and Shri Govind Dixit, DR ORDER Per Ashok Jindal: The appellant is in appeal against the impugned order confirming demand of duty along with interest and imposing penalty by invoking extended period o .....

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m free of cost by the chassis manufacturers. The appellant built bodies of the buses on the chassis and cleared the same on payment of duty w.e.f. 1.4.2007. Rule 10 A was introduced to the Central Excise Valuation Rules, 2000 and as per the said provisions, the job worker has to pay duty on the sale price of the principal manufacturer. From the purchase/sale invoice of the appellant, it was observed that the appellant has received duty paid chassis free of cost from the chassis manufacturer and .....

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manufacturer. Therefore, a show cause notice dated 17.04.2009 was issued to the appellant by invoking extended period of limitation for the period 1.4.2007 to 31.01.2009. The show cause notice was adjudicated relying on the decision in the case of Audi Automobiles Vs. CCE, Indore reported in 2010 (249) ELT 124 (Tribunal-Delhi). Demand of duty was confirmed along with interest and equivalent penalty was imposed. Aggrieved from the said order, the appellant is before us. 4. Shri B.L. Narsimhan, L .....

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, Joint CDR along with Shri Govind Dixit, DR appeared before us and submits that the extended period of limitation has been rightly invoked by the ld. Commissioner. In fact, the appellant has deliberately adopted the way of valuation of their goods i.e paying duty on the cost of chassis + job charges and deliberately chose not to pay duty as per value determined as per Rule 10 A of the Valuation Rules and the appellant did not supply the value/sale invoice of the chassis manufacturer to the depa .....

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a letter with the department on 1.4.2007 explaining therein the method of valuation followed by them as job workers in accordance with Central Excise Law as applicable to job workers, (like the appellants) who manufactured Motor Vehicles (Buses) on chassis supplied by the Principal Manufacturers such as Tata Motors Ltd. In response to the said letter dated 1.4.2007, the Superintendent of Central Excise vide letter dated 1.8.2007 asked for information pertaining to the sale of Motor Vehicles (Bu .....

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but denied valid and material information to the department required under Rule 10A(ii). This denial of crucial information to the department was an act of deliberate obstruction to access material information for correct valuation of excisable goods, reflecting their clear intention to evade payment of appropriate Excise Duty. Subsequently, the department was able to receive the relevant information on 16.03.2009 after issuance of summons to M/s. Tata Motors Ltd., Lucknow. To ascertain the con .....

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er to bring to record the contractual arrangement between the Appellant and their Principal manufacturers i.e. M/s. Tata Motors Ltd. These terms and conditions are mentioned in paragraph 3.1 of the show cause notice dated 17.04.2009 issued to the appellant by the Commissioner of Central Excise, Panchkula. It may please be noted that these terms and conditions excluded the value of ex-showroom price of fully built Motor Vehicles sold by M/s. Tata Motor Vehicles from their Regional Sales Offices a .....

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he exclusive domain and control of the appellant and M/s. Tata Motor Ltd. and not disclosed to the department even after Rule 10A(ii) had become effective on 1.4.2007. It was not disclosed even when the department asked for it in context of Rule 10A(ii) in May, 2008. Tata Motors and Appellant together, had agreed to the contractual terms of their mutual transactions and together did not disclose to the department until investigations took place. Such a contractual arrangement between the Appella .....

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ubstantiated by the facts of the events as they took place during the course of investigations and are recorded in paragraph 5 to 10 of the show cause notice in question. The Unlawful Object of the agreement between the appellant and M/s. Tata Motors is substantiated by the judgement of the Hon ble Supreme Court of India in the case of M/s. Mc Dowell & Co. Ltd. Vs. Commercial Tax Officer dated 17.04.1985 reported as 1985 SCC (3)/1986 AIR 649. The Hon ble Supreme Court after discussing a numb .....

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should be construed literally, or liberally, nor whether the transaction is not unreal and not prohibited by the statute, but whether the transaction is a device to avoid tax, and whether the transaction is such that the judicial process may accord its approval to it. A hint of this approach is to be found in the judgement of Desai, J. in Wood Polymer Ltd. Vs. Bengal Hotels Limited (1) where the learned judge refused to accord sanction to the amalgamation of companies as it would lead to avoidan .....

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es, 597. for what they really are and to refuse to give judicial benediction. 7. Heard the parties. Considered the submissions . 8. In this case, ld. Counsel for the appellant has conceded the issue on merits in the light of the decision of the Audi Automobiles (supra) and Hyva (India) Pvt Ltd. (supra), it has been held by this Tribunal time and again that the appellant is liable to pay duty as per Rule 10 A of the Valuation Rules on the same price of the chassis manufacturer. Therefore, we hold .....

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inafter referred to as CM) manufacturers the chassis fitted with engines for motor vehicles and entrusts the body building work to us. CM clears the chassis on payment of excise duty to us for which cenvat credit is taken by us. We charge consolidated sales consideration for our body building work that also includes the cost of raw materials procured by us, other body building costs & our profit mark up. 2. For the purpose of body building, we purchase various raw materials on our own acco .....

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ssis to CM, we pay applicable sales tax on our sales consideration and which is accepted by the Sales Tax authorities. 3. In the light of above, we understand that the assessable value of body cleared by us to CM would be sum of the body building charges (under Section 4(1)(a) plus cost of chassis (under Rule 6 of the Valuation Rules since there is flow of consideration from CM to the body builders when CM gives the chassis to the body builders for fabrication). We are paying excise duty on the .....

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observation of the ld. Commissioner in the impugned order that the appellant has not provided the details of the sale price of the chassis manufacturer to determine the correct value is not correct as the appellant has given the method of valuation of their goods and in that context, when the investigation was being going on to arrive at the correct value as per Rule 10 A of the Valuation Rules, the sale invoice of the chassis manufacturer was not asked from the appellant. Moreover, whatever ask .....

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cturer was not in possession of the appellant, therefore, the appellant was not in a position to provide the same to the department. In that way, it cannot be said that as the appellant has not supplied the complete details regarding the sale price of the chassis manufacturer and same attracts to suppression, therefore, the charge of suppression stands not proved and as per the decision of the Hon ble Apex Court in the case of Pushpam Pharmaceuticals Company Vs. CCE, Bombay reported in 1995 (75) .....

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as not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression. 11. In the light of the observation of the Hon ble Apex Court, we find that in the case in hand, the appellant has disclosed their method of valuation to the department on 1.4.2007. The valuation was known to the Department w.e.f. 1.4.2007 and the Department failed to do any positi .....

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