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2016 (9) TMI 577 - CESTAT CHANDIGARH

2016 (9) TMI 577 - CESTAT CHANDIGARH - 2016 (344) E.L.T. 1122 (Tri. - Chan.) - Valuation - amortization of the coast of dies/moulds on the value of the goods manufactured - dies/moulds cleared on payment of duty to various parties - adoption of Rule 6 - Held that:- it is found that in the name of amortization what has been done, is simply to take the value of Dies/Moulds and charge excise duty on such value. No effort has been made by the Revenue to arrive at the amortization cost of Dies/Moulds .....

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s only the Cenvat duty paid on the Dies/Moulds have been returned or whether the cost of such Dies/Moulds also stands returned. In the latter case, the dies/Moulds would effectively become free supply in the hands of the appellant. - The value of the goods manufactured by the appellant should include the appropriate fraction of the cost of Dies/Moulds as it have been given in the explanation of Rule 6, but, we are not convinced that the amortization has been properly done on a scientific bas .....

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ated 16.08.2012 passed by the Commissioner of Central Excise (Appeals), Delhi-IV, Faridabad. 2. The dispute is regarding the duty demanded in the impugned order by amortization of the coast of dies/moulds on the value of the goods manufactured by the appellant. The appellant, during the years 2007-08 to 2010-11, manufactured dies/moulds. These were cleared on payment of duty to various parties. These parties subsequently returned the Dies/Moulds to the appellant under invoice on which the appell .....

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n of the Central Excise duty was made and duty of tune of ₹ 2,60,528/- was demanded with interest and imposition of penalty. 3. The appellant has challenged the impugned order mainly on the following grounds: (i) Under Rule 6 of Central Excise Valuation Rules, 2000, the value of Dies/Moulds supplied free of cost needs to be included in the assessable value of finished goods. However, in the present case excise duty has already been paid on the Dies/Moulds. Hence, there is no need to adopt .....

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is reproduced blow: Rule 6- When price is not sole consideration: Where the excisable goods are sold in the circumstances specified in clause (a) of sub section (1) of section 4 of the Act except the circumstance where the price is not the sole consideration for sale, the value of such goods shall be deemed to the aggregate of such transaction value and the amount of money value of an additional consideration flowing directly or indirectly from the buyer to the assessee. Explanation 1 of Rule 6 .....

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ation flowing directly or indirectly from the buyer to the assessee in relation to sale of the goods being valued and aggregated accordingly, namely;- (i)- (ii) Value of tools, dies/moulds, drawing, blue prints, technical maps and charts and similar items used in the production of such goods. (iii) - 6. This rule is attracted when Dies/moulds are supplied by the buyer free of charge or reduced cost for use in connection with the production and sale of such goods. In cases, where the Dies/Moulds .....

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