TMI Blog2017 (7) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... ng CSH 8425. It is thus seen that the appellant themselves are changing their stance on the classification - Held that: - the said vehicles manufactured by BEML and other components manufactured by LTM (BU) have been manufactured to the design supplied by the buyer of the product and all the said items are fitted together to form an integrated mechanical unit which is clearly covered under para-2 of clause (b) of notes under 8425. Valuation - money value of free receipt materials of chassis/vehicles - design and drawing of engineering charges - includibility - Held that: - Held that: - The law is very clear that when design and drawings are intrinsically tied to the emergence of the final product and without which the intended goods cannot be conceived or manufactured, the intrinsic value of such design and drawing charges will necessarily be required to be added for the purpose of determining assessable value of the goods that have emerged neutralizing the same - value of chassis/vehicles and design and drawing charges, since amounting to additional consideration, there value will have to be included in the assessable value of the products cleared as a one single unit. Exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Launcher. (4) that the appellants had mis-classified the Integrated Mobile Missile Launcher and P-II Missile Launcher under CSH 8428.00 instead of 8705.00 of the Schedule to the Central Excise Tariff Act, 1985. Show cause notice was issued to the appellants, inter-alia proposing classification of IMML and P-II Missile Launcher under CSH 8705.00, demand of differential central excise duty of ₹ 2,87,10,149/- with interest liability thereof and imposition of penalties under various provisions of law. On adjudication, the Commissioner vide impugned order dated 19.05.2005, ordered classification of IMML and P-II Missile Launcher under CSH 8705.00, launching mechanism under CSH 8425.00, and held that value of free receipt of Chassis/Vehicle and Design and drawing to be treated as additional consideration and to be added to the assessable value. The additional authority has also confirmed the proposed duty liability with interest, imposed penalty equal to the duty demanded under Section 11AC of the Act, also a penalty of ₹ 2 lakhs under Rule 25 of the Central Excise Act, 1944. Hence this appeal. 3. On 31.05.2017 when the matter came up for hearing, Ld. Advocate Shri. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Sl.No. 217 of Notification No. 6/2002 dated 01.03.2002 cannot be accepted since the product has been manufactured out of chassis manufactured for the vehicles of heading No. 8705; however, the appellants have not proved that they have paid duty on chassis as well as on the equipments. (ii) Although the assessees have argued that vehicles along with Missile Launcher also a special purpose vehicle meriting classification under CSH 8705 and hence eligible for exemption in terms of Sl.No. 217 of Notification No. 6/2002, however, all the said items are fitted together to form integrated mechanical unit which is clearly covered under Para-2 of clause-b of notes under CSH 8425. (iii) Vehicles which were received under exemption without any payment of duty cannot be considered as having discharged duty of excise leviable. (iv) With regard to motor vehicles received from BEML, the same were exempt from central excise duty in terms of Notification No. 63/95 dated 01.03.95. Plea of the appellants that since the said vehicles had suffered nil duty, payment of nil duty is valid discharge of duty, cannot be accepted. (v) Receipt of design and drawings is an additional consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Viewed in this light, we are afraid that the appellants cannot then lay claim to duty exemption under the said notification No. 6/2002 for the impugned products namely IIML and P-II Missile Launcher. The differential duty liability on the clearances of these items made without discharge of proper duty liability thereon will then sustain. Plea of the appellants on this score is therefore dismissed. 5.5 Coming to the classification of launching mechanism etc., assessees themselves have classified the item under 8425 at the outset. They have subsequently sought re-classification of the items under 8705 even in the written submissions submitted during the course of hearing. The appellant seems to be once again claiming CSH 8425. It is thus seen that the appellant themselves are changing their stance on the classification. On the other hand, we find that the adjudicating authority has very cogently analyzed this very aspect in para 16.3 of his order which (page- 34-36 of the appeal paper book) as follows: The LM is a mobile machine. As per the explanatory notes to CSH No. 8426, the heading cover self propelled machine in which the propelling base, the operating controls, the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a-17 of the impugned order that value of chassis/vehicles and design and drawing charges, since amounting to additional consideration, there value will have to be included in the assessable value of the products cleared as a one single unit. 5.8 Coming to the contention of the appellants on limitation, we are unable to find any merit in the contention of the appellants that non-inclusion of value of chassis cannot be considered to hold that the appellants have knowingly or willfully suppressed the value. Appellants are definitely not a neophyte in the field of central excise law and procedure. The fact that they are manufacturing such high value items for launch of missile/defense sector etc., will necessarily cast an additional responsibility on the appellants to ensure their compliance to all procedural requirements including correct discharge of central excise duty liability. The adjudicating authority has therefore correctly held in para-18 of the impugned order that proviso to Section 11A of the Act rightly applicable to demand differential duty and consequent penalty under Section 11AC and penalty under Rule 25 ibid is imposable. The plea of the assessee that the goods wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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