Bright Brothers Ltd. Vs. Commissioner of Central Excise

Bright Brothers Ltd. vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Mar 28, 2002

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Citation: sooperkanoon.com/27921
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: S T Gowri, G Srinivasan
Decided On: Mar 28, 2002
Subject: MRTP

Case Summary

AI-generated summary - not the official court judgment text.

MRTP

Key legal issue: MRTP

Parties & Advocates

Appellant / Petitioner

Bright Brothers Ltd.

Respondent

Commissioner of Central Excise

Legal References

Reported In: (2003)(160)ELT402Tri(Mum.)bai

Excerpt

.....to recover the entire amount recovered by it from telco on the ground that it was additional consideration. the assessee's claim was that each of the invoices issued for sale of the components in question on which duty was paid on this count. in the order impugned in the appeal, the commissioner has not accepted this contention and has demanded duty on the entire portion of the amount received by the applicant.3. it is now settled that the amounts recovered by an assessee from the buyer of the goods towards developing of moulds necessary for manufacture of articles which the assessee supplied to that buyer constitute consideration towards the supply of those goods and these are therefore liable to be included in the assessable value of such goods. amortisation is a method of including these additional costs in that value. each mould has a specific life. the additional consideration therefore would form part of the price of the total number of these components made by using the mould. it is in order to allocate the portion of these costs to each mould that amortisation is resorted to. this is what the applicant has done. the fact that the commercial invoice issued by the applicant for these goods is different from the excise invoice in that it does not include the duty element on the amortised cost and does not, at this stage it appears to us, have any relevance and we are unable to appreciate the emphasis that the commissioner has placed upon this. on the face of it, the assessee has been paying duty on the additional consideration.4. accordingly, therefore, we waive deposit of the duty demanded and penalties imposed on both the applicants and stay their recovery.

Full Judgment

1. The applications are for waiver of deposit of duty of Rs. 1.53 crore and equal penalty on the assessee and penalty of Rs. 25 lakhs on Indru G. Advani, the assessee's executive director.

2. The assessee was engaged in the manufacture and supply of automobile components of plastic to Tata Engineering and Locomotive Co. Ltd. (TELCO for short). TELCO agreed to reimburse to the applicant 60% of the costs that it incurred in developing the moulds which is required to make these components. Notice issued to the applicant proposed to recover the entire amount recovered by it from TELCO on the ground that it was additional consideration. The assessee's claim was that each of the invoices issued for sale of the components in question on which duty was paid on this count. In the order impugned in the appeal, the Commissioner has not accepted this contention and has demanded duty on the entire portion of the amount received by the applicant.

3. It is now settled that the amounts recovered by an assessee from the buyer of the goods towards developing of moulds necessary for manufacture of articles which the assessee supplied to that buyer constitute consideration towards the supply of those goods and these are therefore liable to be included in the assessable value of such goods. Amortisation is a method of including these additional costs in that value. Each mould has a specific life. The additional consideration therefore would form part of the price of the total number of these components made by using the mould. It is in order to allocate the portion of these costs to each mould that amortisation is resorted to. This is what the applicant has done. The fact that the commercial invoice issued by the applicant for these goods is different from the excise invoice in that it does not include the duty element on the amortised cost and does not, at this stage it appears to us, have any relevance and we are unable to appreciate the emphasis that the Commissioner has placed upon this. On the face of it, the assessee has been paying duty on the additional consideration.

4. Accordingly, therefore, we waive deposit of the duty demanded and penalties imposed on both the applicants and stay their recovery.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Bright Brothers Ltd. vs Commissioner of Central Excise Same Subject MRTP Same Judge S T Gowri, G Srinivasan