2026-VIL-1504-CESTAT-CHD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Inclusion of notional value of drawings and designs in assessable value of excisable goods - Rule 6 of Central Excise Valuation Rules 2000 - Appellant is OEM supplying automobile components to motor vehicle manufacturer who provided specifications and drawings free of cost - Department sought to load notional value of drawings and proportionate royalty paid by buyer to third party into assessable value of goods manufactured by Appellant - Whether specifications and designs supplied by buyer at tender stage constitute additional consideration under Rule 6 - HELD - Section 4(1)(b) of Central Excise Act, 1994 read with Rule 6 of Central Excise Valuation Rules, 2000 permits inclusion of additional consideration only when buyer supplies goods and services for use in connection with production and sale of goods and only to extent value has not been included in price actually paid. Rule 6 specifically provides that value of drawings blueprints technical maps and charts used in production and value of design work necessary for production can be treated as additional consideration - Specification drawings supplied at tender stage for vendor selection and shortlisting are merely indicative requirements to enable prospective vendors to quote prices and constitute buyers assist not assistance to manufacturer. The specification drawings neither constitute goods used in production nor are they necessary for production as appellant had to prepare detailed drawings and designs using technical support from parent company for which running royalty was paid - Distinction exists between mere specifications and layouts which inform manufacturer of buyers requirements and detailed engineering drawings which contain information necessary for actual manufacture. Specification drawings cannot be said to be drawings used in production or necessary for production – No additional consideration has flowed from buyer to appellant over and above transaction price. Rule 6 of Central Excise Valuation Rules is not attracted - The impugned order is set aside and the appeal is allowed
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