No Evidence of Inclusion of Excise Duty in Price Charged from Buyer: CESTAT Grants Benefit of Cum-Duty Price [Read Order]

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted benefit of cum-duty price on absence of evidence of inclusion of excise duty in the price charged from buyer.

It appeared that a distinctive product emerged inasmuch as CNG/LPG gas conversion kit assembly came into existence as result of process applied. It appeared that the same constituted manufacture within the meaning of Section 2(f) of the Central Excise Act, 1944 and appellant, Messrs Rohan Automotive Equipment Pvt Ltd, was liable to pay duty. Since CNG/LPG gas conversion kit assembly merits classification under Heading 84.09 as suitable for use solely or principally with the engine of heading 84.07 or 84.04 of the First Schedule to the Tariff Act.

Based on this the show cause notice was issued to the appellant for recovery of duty for the period from 2007-08 to 2009-2010 along with interest under Section 11AB and also for imposition of penalty on the appellant under Section 11AC. The show cause notice was adjudicated vide impugned Order-in-Original by which the Commissioner holding the appellant’s activity as manufacture of the goods attracting the Central Excise Duty under Tariff head84.09.

Paresh M. Dave, counsel appearing for the appellant submits that there is no finding in the impugned order that any processes were undertaken by the Appellant on the bought-out parts and components, and there is also no finding in the impugned order that a complete kit was assembled and then sold to the buyers in completely assembled condition.

The Counsel further submitted that no process on the bought-out parts is undertaken by the appellant, but all such parts are packed in a box and the supply was made to traders, and the box carried the details like the Appellant’s name and Ahmedabad. Such activity of collecting various components and packing them into a box for installation in a motor vehicle is not manufacture, and excise duty is not leviable on such activity.

A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We further observed that in the present matter appellant also claimed the benefit of cum-duty price which was denied by the learned Commissioner on the ground that no evidence of inclusion of excise duty in the price charged from the buyer has been produced by the Appellant before him. However we find that the benefit of the same is liable to be extended to the appellant.”

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates