COMMISSIONER OF CENTRAL EXCISE, JAMSHEDPUR Vs. TATA MOTORS

JUDGEMENT

(1.) HEARD both sides.

(2.) THESE 85 Appeals filed by the Department and 29 Cross -Objections filed by the Respondents have been taken up together for hearing and disposal, which relate to two impugned Orders -in -Appeal passed by the lower Appellate Authority and deal with a common issue.

(3.) WE have heard the learned Advocates and Authorised Representatives appearing for all concerned, as listed above. The brief facts of the case are that M/s. Tata Motors (earlier known as M/s. TELCO) have got various components of chassis and motor vehicles manufactured by a number of vendors who are the Respondents in this case. The vendors have paid the duty on the components and these have been sold to M/s. Tata Motors who have taken credit of the duty paid on the components. While placing orders for the components, technical drawings have been supplied by M/s. Tata Motors free of cost to the vendors for manufacturing the components. Admittedly, during the impugned period, no amount has been added towards the drawings and design in the value of the components. The Departments case is that the cost of such drawings and designs involved in the manufacture of the said components, should be included in the assessable value of the components manufactured by the vendors. The case of the Department rests on the provisions of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Explanation 1 to the said Rule 6 reads as under : - Explanation 1 - For removal of doubts, it is hereby clarified that the value, apportioned as appropriate, of the following goods and services, whether directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale of such goods, to the extent that such value has not been included in the price actually paid or payable, shall be treated to be the amount of money value of additional consideration flowing directly or indirectly from the buyer to the assessee in relation to sale of the goods being valued and aggregated accordingly, namely: -