TMI Blog2021 (10) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... the said hundred rupees was amortised for 10 pieces or 15 pieces. What is important is to see whether or not the cost of the pattern has been amortised and has suffered Central Excise duty or otherwise. It is not the case of the department that the cost of the pattern was not amortised in the initial number of castings supplied as per certification by BEML. It is also not the case of the department that they have received some other patterns for the manufacture of castings additionally to the initial order and certificate by the customer i.e. M/s. BEML. The appellants have amortised the full value of patterns supplied to them by their client. It is neither legal nor proper to ask the appellants to continue the amortisation while clearing the additional castings using the same patterns whose value has been already amortised. It is not the case of the department that the appellants have received new set of patterns whose value remains to be amortised. It is also not the case of the department that the appellants received any additional consideration for the same patterns. Under the circumstances, it cannot be said that the appellants have evaded duty by not amortising the pattern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mutual Industries Vs CCE Mumbai - 2000 (117) ELT 578 (Tri.). Being aggrieved by the same, the appellants preferred an appeal before Hon ble High Court of Madras vide C.M.A.No.2555 of 2019. The Hon ble High Court of Madras vide order dated 17.06.2019 have given the following order and directions: 4. Learned Counsel for the Revenue, however, sought to justify the impugned order passed by the Tribunal. 5. Having heard the learned counsel appearing for the parties, we are of the opinion that the order passed by the learned Tribunal is a non-speaking order and except relying on the Larger Bench decision, the Tribunal failed to appreciate the contention in a proper perspective and the finding as to whether any additional Excise Duty is payable by the Assessee or not is based on factual aspects, the Tribunal ought to have been undertaken this exercise and after considering the objections of the Assessee in this regard and giving reasons for arriving such a conclusion, ought to have demanded the additional Excise Duty, if any. 3. Learned Counsel for the appellant submits that cost of free patterns supplied by BEML for manufacturing 25/75/75 pieces of castings has been duly amor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .-Mumbai) held the issue in a similar case in favour of the appellant. He further submits that CBEC vide Circular No.170/4/96-CX dated 23.01.1996 have also clarified that theproportionate cost of value has to be included in the assessable value of the castings which the appellant did it in 25/75/75 castings. 6. Learned counsel submits also that invocation of extended period under proviso to Section 11A was bad in law. The Tribunal, in the case of Star Glass Works Vs CCE Mumbai - 2003 (162) ELT 367 (Tri-Mumbai) [maintained by the Hon ble Supreme Court in 2004 (163) ELT A46 (SC)], held that the cost of patterns which were supplied free of cost to the customer was not included in the assessable value of the product; however, there is nothing to show that the appellant, despite knowing or having reason to believe that these costs were includable, yet stated that they were not. Having regard to the fact that the state of law was unsettled, it was possible for the appellant to come to the conclusion that it did. The facts of the case does not justify invocation of extended period. He further submits that issue has arisen out of a CERA objection and was also contested by the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utual Industries (supra). It is clear from the said order that the same was rendered under Rule 5 of Central Excise Valuation Rules, 1975. The relevant paragraphs of the order are reproduced as under: 4 . In Flex Industries Ltd. v. CCE, Meerut - 1997 (91) E.L.T. 120 appellants were manufacturing Printed Polyester Films to make packing pouches. Printing of films was done through the medium of Gravure Printing Cylinder. These cylinders are manufactured to suit the needs of individual customers. The finished products were cleared on payment of duty on their value without taking into consideration the value of printed cylinders. Appellant was recovering from customers cost of cylinders used in the manufacture of pouches on debit notes. Department found that the appellants were splitting up single transaction of manufacture of finished products into two, namely, manufacture of cylinders and manufacture of finished products with a view to evade payment of duty. This stand of the Department was disputed. Overruling that objection differential duty was claimed. So the question whether price collected for cylinders can be included in the assessable value of the finished product came u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for the sale of the finished product when the mould was supplied by the customer. Without the mould supplied by the customer, which is having substantial value, the product could not have been manufactured. So it is crystal clear that the price of the finished goods was fixed by the appellant and the customer taking into consideration the supply of the mould by the customer. In other words, had the mould not been supplied by the customer, appellant could not have agreed to the price of the finished goods at the price as is evidenced by the contract entered into between them. So, the price of the finished goods fixed in the contract between the parties can safely be taken as not the sole consideration for the sale of the finished product. The other consideration is the value attributable to the use of the mould. In this view of the matter, we are not in a position to agree with the conclusions arrived at by West Zonal Bench, Mumbai in the three decisions referred to earlier. With respect we approve the decision rendered by this Tribunal in Flex Industries Ltd. case (supra) . ... .... ..... 11 . The conclusions reached by us as stated above do not go to support the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally sustainable. Therefore, we hold that the proceedings initiated against the appellant pursuant to show cause notice dated 25-10-1991 is clearly barred by limitation. Consequently the impugned order has to be set aside in its entirety. We do so. 9. However, we find that Tribunal in the case of Mega Rubber Technologies Pvt. Ltd. (supra) has analyzed the case in terms of new Central Excise Rules where the concept of transaction value has come into effect. The Tribunal observed as follows: 6.1 We find that the first appellate authority has upheld the contentions of the assessee on the provisions of applicability of Rule 16 of Central Excise Rules. The said rules empower the assessee to receive back the finished goods and take CENVAT Credit of the duty paid on such goods and reprocess/manufacture them and clear the goods on payment of duty. At given point of time the process undertaken by the assessee-respondent does not amount to manufacture, the assessee is required to reverse the amount of CENVAT Credit availed on such goods. In the case in hand as seen from the records, it is very clear that the assessee had tried to reprocess the finished goods received and in few cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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