Appeal No. E/2032/201, (Arising out of OIA No.43/APPL/DLH/250 dt. 13.05.2011 passed by the CCE (Appeals), Delhi-IV). Case: Ms.Auto Gallan Ind. (P) Ltd Vs CCE, Delhi-IV, Faridabad. CEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)

Case NumberAppeal No. E/2032/201, (Arising out of OIA No.43/APPL/DLH/250 dt. 13.05.2011 passed by the CCE (Appeals), Delhi-IV)
CounselFor Appellant: Shri K.L.Handa, Consultant and For Respondents: Shri V.K.Trehan, AR
JudgesMr.Devender Singh, Member (Technical)
IssueCentral Excise Act, 1944 - Section 2(f)
Judgement DateMay 15, 2017
CourtCEGAT (Customs, Excise & Gold (Control) Appellate Tribunal) & CESTAT (Customs, Excise and Service Tax Appellate Tribunal)

Order:

Devender Singh, (Single Member Bench Chandigarh)

  1. The brief facts of the case are that the appellants are engaged in the manufacture of starter motor assembly. They had purchased 10 machines collectively valued at Rs.12,57,700/- as is mentioned in invoice No.4024 dated 19.9.2005 issued by M/s.Auto Ignition Ltd and availed the Cenvat credit of Rs.2,01,392/- and education cess of Rs.4,028/- on the basis of said invoice. They further availed credit of Rs.5,98,608/- and education cess of Rs.11,912/- on the strength of the supplementary invoice No.9949 dated 27.3.2006 issued by M/s.Auto Ignition Ltd. for the duty paid on design and development charges. The Revenue felt that the design and development charges for the 3-Wheeler project after 6 months of sale of goods do not fall within the definition of manufacture under Section 2(f) of the Central Excise Act, 1944 and the credit of Rs.6,10,580/- taken by them was therefore not admissible. Accordingly, the show cause notice was adjudicated, resulting in demand of duty Rs.6,10,580/- and imposition of equivalent penalty. The appellant went in appeal and their appeal was rejected and the adjudication order was upheld. Aggrieved from the same, the appellant has filed this appeal.

  2. Learned Advocate for the appellant submits that the assessable value of the goods is aggregated to the transaction value and value of engineering, design and development work are essential for the purpose of manufacturing and same have to be included in the assessable value. The appellant have availed the credit validly on the basis of invoice, which is in order. The appellant is recipient of the capital goods and the authorities at the end of the recipient cannot re-determine the entitlement of the credit. He also stated that there is no provision in any Central Excise law requiring the manufacturer to submit any information or argument to the department before availing the credit. He also argued that the department took more than two years to issue show cause notice and the same is barred by limitation as held in CCE, Kolkata-II vs. Giriraj Industries-2008 (223)...

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