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TMI Blog2023 (6) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice dated 27.07.2009 was issued for the period July 2004 to March 2009 demanding excise duty short paid. After due process of law, the adjudicating authority confirmed the demand of duty for Rs 4,66,908/- with appropriate interest and imposed an equal penalty. The same was upheld by the Commissioner of Customs, Central Excise and Service Tax (Appeals) vide Order-in-Appeal No.181/2013 (M-IV) dated 24.04.2013. Aggrieved by the impugned order the appellant is before us. 3. No cross objection has been filed by the respondent. 4. We have heard Shi N Viswanathan learned counsel on behalf of the appellant. He submits that the appellant had taken a conscious decision to discharge the duty on the moulds and dies manufactured by them on behalf of their customers notwithstanding the fact that the same are exempted from the payment of the duty of excise when used within the factory of production for manufacture of components as per notification 67/1995 CE. The appellant have also not availed of the duty paid on the moulds and dies which was otherwise eligible to them by way of CENVAT credit. The reason for their above decision was only to avoid the procedural hassle of having to amorti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on the Larger Bench judgment passed in the case of Mutual Industries Ltd. Vs. Commissioner of Central Excise, Mumbai [2002-TIOL-543-CESTAT-DEL-LB], wherein the Hon'ble Tribunal held that additional value of the moulds must necessarily go in assessing the duty payable on the finished product under the excise law. She stated that the judgment is squarely applicable to the present case and prayed that the impugned order may be upheld. 6. The issue to be decided in this appeal are whether; (a) the cost of moulds and dies manufactured by the appellant and sold to their customers should be included as an amortised cost, when the said moulds and dies are used in the appellants factory for manufacture of 'aluminum die-castings' for the said customers, in terms of Rule 6 of CVR or not? (b) the demand is hit by the limitation of time. 7. Section 3 of the Central Excise Act, 1944, provides for the levy and collection of the duty of central excise. It is a levy on all excisable goods, other than salt, produced or manufactured in India. Section 4 of the Act lays down the valuation principles by reference to which the duty of central excise is to be assessed on all excisable goods. As pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance deposit (emphasis added) Boards Circular No. 170/4/96-CX dated 23/1/96 issued from file No. 6/14/94-CX.I which clarifies the issue is also reproduced below; Subject: Foundry Industries- Calculation of assessable value of castings Addition of value of patterns supplied by the buyers in the assessable value. It has been brought to the notice of the Board by Maharashtra Chambers of Commerce & Industry that there is difficulty in determination of value of patterns used in foundry industry to be added in the cost of castings for arriving at the assessable value of the castings as the quantity of casting to be made out of a pattern cannot be anticipated and sometimes some modifications or repairs are also made in the pattern after some period of use. 2. A survey was floated to ascertain the actual position in the field formations. From the reports received, it is observed that generally commissioners are of the view that cost of the pattern should be added in the assessable value of the castings. However, in some Commissionerates, the proportionate value of the pattern is not being added in the assessable value of the casting if such patterns are supplied by the buyers o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moulds) has to be included in the assessable value of the casting even in cases when such patterns (in this case dies and moulds) are being supplied by the buyers of the casting or are got prepared / manufactured by the job worker at the cost of the buyer. Amortization is understood as an accounting method for spreading out the costs of an asset over the expected period the said asset will provide value. Amortizing the value of dies and moulds will include amortizing its total monetary value ie transaction value plus the duty's paid on it. 7.2 Double taxation with reference to central excise duties on goods means levying central excise taxes twice on the very same excisable product, which is not the case here. In this case the appellant pays central excise duty first on the dies and moulds, which is a capital good and subsequently on the aluminum die-castings, manufactured by using the capital good, both of which are two separate excisable products. Had they purchased the dies and moulds from the market its price, inclusive of the duties paid, would have automatically entered the price of the aluminum die-castings manufactured and sold by them. Just because they get the dies and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se eligible for CENVAT credit but did not avail the same due to the difficulty of book keeping etc, will not suffice. In another landmark judgment in Rohitash Kumar & Ors. v Om Prakash Sharma & Ors [(2013) 11 SCC 451], covering the interpretation of statutes the Hon'ble Supreme Court held that inconvenience or hardship is not a ground for the court to interpret the plain language of the statute differently, to give relief. Relevant portion of the judgment is given below; "19. In Bengal Immunity Co. Ltd. v. State of Bihar & Ors., AIR 1955 SC 661 it was observed by a Constitution Bench of this Court that, if there is any hardship, it is for the legislature to amend the law, and that the Court cannot be called upon, to discard the cardinal rule of interpretation for the purpose of mitigating such hardship. If the language of an Act is sufficiently clear, the Court has to give effect to it, however, inequitable or unjust the result may be. The words, 'dura lex sed lex' which mean 'the law is hard but it is the law.' may be used to sum up the situation. Therefore, even if a statutory provision causes hardship to some people, it is not for the Court to amend the law. A legal en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for the sale. Further, Rule 5 of Central Excise (Valuation) Rules, 1975 stipulates that where the price is not the sole consideration, the value of the goods shall be based on the aggregate of such price and the amount of the money value of any additional consideration flowing directly or indirectly from the buyer to the assessee. In the instant case, the price of the finished goods has been fixed between the appellant and the customer. Can one say that the price so fixed is the sole consideration 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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