Cce, Chennai-Iv vs M/S. Nettur Technical Training

(Arising out of Order-in-Appeal No.19/2003 M-III dated 23.12.2003, passed by the Commissioner of Central Excise (Appeals), Chennai).

CCE, Chennai-IV : Appellant

Vs.

M/s. Nettur Technical Training Foundation Industries Ltd. : Respondent

Appearance

Shri L. Pannerselvam, AC (AR) For the applicant

Shri T. Ramesh, Adv., For the respondent

CORAM

Honble Shri D.N, PANDA, Judicial Member Honble Shri R. PERIASAMI, Technical Member

FINAL ORDER No.

Date of Hearing/Decision: 27.04.2015

Per: D.N. Panda

The show cause notice made following propositions consequent upon examination of certain materials available on record:

(i) the development charges collected from the buyers of component for developing the tools are to be added proportionately to the components supplied as the development charges so received is in relation to the manufacture of components and hence form the part of the assessable value as per Section 4 of Central Excise Act, 1944.

(ii) the amount collected from the buyers of the components for the cost of tools is also to be proportionately included to the assessable value of the components as the tool cost so received is in relation to the manufacture of components and hence form the part of the assessable value as per Section 4 of Central Excise Act, 1944.

(iii) an amount of Rs. 6,53,169.36 collected separately from the buyers of the components under the head Excise duty on the tools used in the manufacture of components prior to the introduction of Section 11D also to be added to the assessable value for redetermining the same. In the absence of remittance of the same as Excise duty to the Government, it is to be considered as the additional consideration and to be added to the assessable value of the components.

(iv) the revision in the cost of inputs supplied by the buyers had to be adopted and the assessable value of the components to be revised accordingly.

2. The contention of the assessee in so far as the issue in (i) above is concerned that the same is of no relevance because even if included in the assessable value the finished goods are exempted from duty.

3. So far as the issue in (ii) above is concerned contention of the assessee is that the cost of tools used in the manufacture of components being attributable to issue (i) above and this issue has also no consequence to the Revenue.

4. So far as the issue in sl. No. (iii) is concerned, the contention of the assessee is that the money collected from the buyers to the extent of Rs. 6,53,169.36 having been deposited, Section 11 D does not apply. Revenue baselessly alleges that because these collections even if made prior to introduction of Section 11 D to the Central Excise Act, 1944 the assessee is liable to pay. But assessee having deposited this amount, no dispute arises.

5. So far as the issue in sl.No.(iv) above is concerned, the contention of the assessee is that even if the cost of inputs is included in the assessable value, the final goods not being liable to duty, this issue is also of no relevance.

6. Revenue came in appeal only against issue in sl.No. (i) and (ii) before ld. Commissioner (Appeals). But it contends that the issues raised in the show cause notice in para-4 as reproduced above was not decided in accordance with law by the authority below. Therefore, the appellate authority went wrong in para-5 (B) of his order to dismiss the appeal of the Revenue. The assessee failing to pay appropriate duty as manufacturer of tools and dyes, it is liable to duty. Similarly on all other disputes in the show cause notice, the assessee is liable to pay duty.

8. Heard both sides on their submissions to ascertain what was the dispute. There is no dispute by Revenue that the finished goods are not liable to duty. Therefore there shall not be any controversy on the issues in sl.No. (i) and (ii) raised in the aforesaid show cause notice.

9. So far as the amount collected separately from buyers to the extent of Rs. 6,53,169.36 is concerned, even though collection made was prior to introduction of Section 11D, it is necessary to verify whether this money has gone to the treasury or not. This can be stated following the ratio laid down by the Honble Supreme Court in the case of Sahakari Khand Udyog Mandal Ltd. Vs. CCE  2005 (181) ELT 328 (S.C.). It may be stated that no one can be enriched at the cost of the state following the ratio laid down by the Apex Court in the case of S.P. Chengalvaraya Naidu Vs. Jagannath  AIR 1994 (SC) 853 and no Court shall allow the party to retain the gain made by a person what that was not due to him. Therefore assessee is required to deposit the same even in absence of Section 11D of the CEA,1944. The authority shall verify the deposit particulars and evidence and pass appropriate order on this limited issue only.

10. So far as the issue in sl. No. (iv) above is concerned, the assessee succeeds because revision of cost has no significance when it is supplied by buyer to the assessee not being liable to duty because its finished goods are ultimately exempted which remained undisputed by Revenue.

11. Revenue appeal is dismissed on all counts except on the count of verification of an amount of Rs. 6,53,169.36 collected by the assessee separately as to whether that has been deposited into the treasury. The assessee at his own accord may provide the details to the adjudicating authority within 3 months of receipt of this order to satisfy that authority as to the deposit of that amount.

12. We may state that although appellate authority has coterminus and coextensive power to examine the matter in controversy, he failed to do so on the plea that adjudicating authority has not dealt the issues. Tribunal having the jurisdiction to advance causes of justice, above direction has been made to serve interest of justice.

(Order dictated and pronounced in the open Court)

(R. PERIASAMI) (D.N. PANDA) TECHNICAL MEMBER JUDICIAL MEMBER

BB

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