Legally Provided Scheme of Assessment of Goods to be Followed While Clearing Goods even for Export: CESTAT [Read Order]

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), ruled that legally provided scheme of assessment of goods to be followed while clearing goods even for export.

The appellant, Pgp Glass Private Limited, while manufacturing empty glass bottles and vials, as per requirement of the customers they get developed various types of moulds and the amount of development of such moulds has been collected by the appellant from their customers as mould charges.

It has been the contention of the department that amount so collected by the appellant from their customers as mould charges is an additional consideration and should form part of the transaction value, as per Section 4 of Central Excise Act, 1944 for the purpose of discharging Central Excise liability.

Thus, the sole issue on which the Revenue has confirmed the demand holding that amount of the charges recovered by the appellant towards the value of moulds should have been added in the transaction value of the glass bottles supplied by the appellant to their customers the mould charges recovered from the buyers of bottles after clearances are, an additional consideration following back to the appellant as per Section 4 of the Central Excise Act, 1944 read with Rule 6 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000.

The Chartered Accountant, Mehul Jivani who appeared on behalf of the appellant has primarily contended that mould charges recovered by the appellant in respect of goods exported and thereby even if the duty been paid by the appellant on such charges, the same would have got refunded to them. It has also been contended by them that excise duty applicable on domestic supplies has already been paid by them and the required evidence with regard to payment of duty on the supplies made to the domestic customers have already been produced by the appellant before the original adjudicating authority.

Rajesh K Agarwal, reiterated the findings given in the order-in-appeal as well as in order-in-original.

A Two-Member Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “In this case, there is no denying the fact that appellant has been collecting mould charges from the buyers of his product and therefore we hold that the amount of mould charges collected by the appellant forms an additional consideration flowing through the appellant and therefore the same need to be included in the assessable value of excisable goods. The legally provided scheme of assessment of the goods needs to be followed while clearing the goods even if they are meant for export.”

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