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TMI Blog2023 (9) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... such designing and engineering services and not included the same in the assessable value for the purpose of payment of central excise duty.. 2. The Anti-Evasion wing of Kolkata-VI Central Excise Commissionerate initiated an investigation against the Appellant, as a result of which a Show Cause Notice dated 30.11.2007 was issued to them demanding Central Excise duty of Rs,1,12,11,259/-including Cess on the ground that the drawing, design and engineering charges collected by them were not included in the assessable value for the purpose of calculating the Central Excise duty liability. The Notice was adjudicated by the Commissioner, vide Order-in-Original dated 17.10.2008, wherein the duty demanded in the Notice was confirmed along with interest and penalty. Aggrieved against the impugned order, the Appellant filed the present appeal. 3. In their grounds of appeal, the appellant stated that the drawing and engineering services rendered by them were not related to the goods manufactured by them. They were related to post manufacturing activities such as civil, structural and electrical works, which is evident from the concerned contracts. The allegation of the department is mainly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for the execution of Turnkey project, it does not form part for the manufacturing of goods. 6. The stated that when the contract has two different payment terms and obligations which are to be fulfilled separately, there is no scope to club the consideration related to services and manufactured goods. In support of this claim they relied upon the decision of the Tribunal in the case of Stone India Ltd. reported in 2007(212)ELT209(Tri-Kol). 7. The Appellant further stated that excise duty cannot be demanded on the same amount on which service tax has been discharged. In support of this contention, they cited the decision of CESTAT, Bangalore in the case of Osnar Chemical Pvt. Ltd. Vs CCE, Bangalore-II, reported in 2009(240)ELT.115. The said contention that excise duty and service tax cannot be imposed simultaneously, has been accepted in the following decisions: (i) Commissioner GST, Ghaziabad Vs M/s. Shape Machine Tools Pvt. Ltd. 2019(11)TMI 171 (ii) CCE, Thane-I Vs Spectron Engineering Pvt. Ltd., 2020(33)GSTL.223 (Tri-Mumbai) (iii) CCE, Pondicherry Vs Erricsson India Pvt. Ltd. 2007(212)ELT 198(Tri-Chennai) 8. The Appellant stated that the Notice issued was barred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s during the relevant period were Turnkey Projects, wherein the drawing, design and engineering services were provided not for manufacture and supply of excisable goods, but for post manufacturing activities such as Civil and structural work, electrical work, drawing for foundation of buildings and equipments, color schemes, Lighting earthing and lightening protection drawings, Terminal Plans and inter-connection diagrams for electrical works etc. In respect of turnkey project contracts, the "Time Schedule" and "Price Schedule" of the contracts clearly state that the design and engineering services are provided at 'site'. They stated that drawing, design and engineering is a pertinent service for the execution of Turnkey project, it does not form part for the manufacturing of goods. 13. We observe that, as per Explanation 1 (iv) of Rule 6 of Central Excise Valuation Rules, engineering and designing charges are includable in the assessable value of the goods manufactured. But, the question here is whether the drawing and designing in these contracts executed by the Appellant pertains to goods manufactured as claimed by the department, or pertains to post manufacturing activities as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der which the assessee is rightly required to pay their tax liability. This view has been held by this tribunal in the case of Phoenix Yule Ltd Vs CCE, Kol-III, the relevant portion of the decision is reproduced below: "10. The second question, which is before us for the decision, is since the assessee has already taken service tax registration for the same activity and have been paying service tax, whether they need to pay Central Excise duty again on the same activity and whether the charges of suppression, mis-statement, fraud or mis-representation are invocable in this case for demanding duty under the extended time proviso of Section 11A(1) of the Central Excise Act, 1944 and whether the penalty under Section 11AC is also imposable on them. In this regard, we are of the opinion that the tax under any statute is to be assessed and paid as per the requirement of that statute. Even though the assessee might have paid the tax wrongly under a different tax statute, it in fact does not satisfy the compliance of the statute under which the assessee is rightly required to pay his tax liability. This view has also been taken by the Hon'ble Supreme Court in the case of M/s Idea Mobile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 to June 2007. Major portion of the demand was beyond the normal period of limitation. The Appellant contended that, as there was no suppression of fact with an intention to evade payment of tax involved in this case, the demand confirmed by invoking the extended period of limitation is liable to be set aside. We find merit in the contention of the Appellant. We observe that the Appellant has been registered with Service Tax department and paying service tax regularly on the drawing, design and engineering charges collected by them. They have filed ST-3 Returns wherein the service tax paid by them has been reported. Thus, we observe that the payment of service tax on the drawing, design and engineering charges are well within the knowledge of the department. Hence, we hold that there was no intention to evade payment of central excise duty on the part of the Appellant by not including the Drawing, design and engineering charges in the assessable value. It is a matter of interpretation. The Appellant considered these charges were liable for service tax and paid service tax according to their interpretation and declared the same in the ST-3 returns filed. If the department was of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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