Friday, 15 September 2017

CESTAT : Amortized cost of modifying free dies & tools includible in manufactured goods' value

Amortized cost of modifying dies & tools supplied free by customer includible in assessable value of manufactured motor vehicle parts; Noting that assessee discharged service tax on modification charges collected from customer, CESTAT observes that modification cost is nothing but an addition to the value of overall dies & tools used in manufacture; Referring to Rule 6 of Central Excise Valuation Rules, CESTAT remarks that it doesn’t make any difference whether assessee carried out any modification to dies, moulds & tools supplied free of cost by customer; Upholds invocation of extended period of limitation on ground of suppression of facts, noting that assessee had never disclosed collection of charges either through any communication / in monthly returns; Rejects assessee’s plea of revenue neutrality, thereby disallowing CENVAT credit to customer and also imposes penalty u/s 11AC : Mumbai CESTAT

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