Audi Automobiles & Ors. Vs. Commissioner of Central Excise and Service Tax (Supreme Court of India)
Summary: The Supreme Court of India considered whether the Department could invoke the extended period of limitation under the proviso to Section 11A of the Central Excise Act, 1944 against Audi Automobiles & Ors. in relation to valuation of body-built motor vehicles.
The appellants were engaged in body building of motor vehicles as job workers. Manufacturers supplied chassis to them, on which the appellants built the vehicle bodies. When the chassis were cleared by the manufacturers for body building, excise duty was paid on a valuation determined under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, at 110% of the cost of manufacture. After body building, the completed vehicles were returned to the manufacturers. At the job worker’s stage, excise duty was computed after availing CENVAT credit of the duty paid on the chassis.
The dispute concerned whether the additional 10% included in the valuation of the chassis under Rule 8 had to be included again while determining the assessable value of the completed body-built motor vehicle. The appellants’ position was that the additional 10% represented the manufacturer’s profit margin and was not required to be included. The Supreme Court, however, held that the 10% formed part of the statutorily determined value of the intermediate product, namely the chassis, and therefore had to be included in the assessable value of the completed vehicle supplied by the job worker.
