M/S. Asp Sealing Products Ltd vs C.C.E. Meerut-Ii

[Arising out of Order-in-Original No. 302-CE/MRT-II/2005 dated 20.12.2005 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Meerut].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. ASP Sealing Products Ltd. .Appellants

Vs.

C.C.E. Meerut-II .Respondent

.

Appearance:

Shri Bipin Garg, Advocate for the Appellant

Shri R.K. Gupta, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

Date of Hearing: 24.07.2015

FINAL ORDER NO. 52347/2015-EX(DB)

Per Ashok Jindal:

The appellant is a manufacturer of rubber profile and sealing products. The appellant is manufacturing these goods on the specific purchase orders of the buyers. In certain cases appellant procured advances / security from the buyers and certain cases goods are sold to the buyers who have not deposited any amount as security deposit to the appellant. Appellant is clearing their manufactured goods in domestic area on payment of duty. The appellant also received development charged for manufacturing of dyes and moulds for the finished goods to be manufactured as per the specification given by the buyers which goods were ultimately exported. During the course of investigation it was revealed that is appellant has not amortized the cost of dies and moulds in the assessable value of the finished goods cleared and have not amortized notional interest on the security deposit. Therefore, appellant has undervalued their finished goods. Consequently, a show cause notice was issued to the appellant to pay differential duty along with interest. Proposal of imposition of penalty was also made. Both the lower authorities confirmed the demand on both the accounts. Aggrieved from the said order appellant is before us.

2. Shri Bipin Garg, Ld. Counsel for the appellant submits that the price of their finished goods is same if they are sold to buyers from whom they have taken security deposit and from whom they have not taken security deposit. In support of this contention he produced certain invoices showing the assessable value in both the cases is same. Therefore, he prayed that the buyers from whom security deposit has been taken, the assessable value is not influenced as appellant is paying interest and incentives by way of credit notes to the buyers from whom they have taken security deposit. On the second issue it is the contention of the Ld. Counsel that the development charges received on account of moulds and dies for the goods which were ultimately exported as the exported goods are not liable to duty if appellant has not amortized the cost of moulds and dies that will not affect their duty liability. It is also contended by him that appellant has not received any extra charges from the foreign buyer on account of moulds and dies.

3. On the other hand, Ld. AR oppose the contention of the Ld. Counsel and submits that the interest on security deposit, value of moulds and dies are to be amortized to arrive at correct assessable value which appellant has not done. Therefore, impugned order is to be upheld.

4. Heard the parties. Considered the submission.

5. During the course of arguments the Ld. Counsel produced two invoices, namely invoice No. G/4504 dated 12.12.2001 of M/s. Milan Motors from whom the appellant has taken security deposit and shown the price of item code SPFDS83 as Rs.243 per unit. He also produced an invoice no. G/2367 dated 29.08.2001 in the name of M/s. Jay Enterprises from whom appellant has not taken any security deposit for the item code SPFDS83 at the rate of Rs.243 per unit. As appellant has been able to show that in both the cases the assessable value arrived by the appellant is same and on which they have paid the duty. But in the impugned orders we have not seen that these invoices have been compared by the lower authorities or not. Therefore, it would be in the interest of the justice to set aside the impugned order and remand matter back to the Adjudicating Authority to verify the invoices and thereafter to arrive at a correct assessable value. We also observed that the appellant has shown in their Balance Sheet certain amounts received towards development charges for moulds and dies but it is contended by the appellant that they have not received any extra amount from the buyers on account of development charges for moulds and dies. Further it is the contention of the appellant that these moulds and dies are for specific orders procured from the foreign buyer and no other goods manufactured from these moulds and dies which were cleared in DTA. As this fact is also to be ascertained from the records of the appellants to arrive at a decision whether appellant has received any extra money for development charges on account of moulds and dies and these moulds and dies are exclusively used for export goods. Therefore, on this account also matter needs examination at the end of adjudicating authority.

6. With these observation we set aside the impugned order and remand matter back to the Adjudicating Authority to decide the correct assessable value as discussed and directed here in above. With these terms appeal is disposed of by way of remand.

0

(Dictated and pronounced in the open court)

(B. Ravichandran) (Ashok Jindal) Member (Technical) Member (Judicial)

Bhanu

2

E/1626/2006-EX(DB)