TMI Blog2023 (2) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... section 4 of Central Excise Act, 1944 that several elements enumerated therein combine to designate such price as transaction value on which appropriate rate of duty would, in accordance with section 3 of Central Excise Act, 1944, apply. These are the price to be the sole consideration for sale of goods sold by the manufacturer for delivery at the time and place of removal and to the extent that the assessee and the buyer are not related each other. There is no finding in the impugned order, or unearthing by investigation, that the details of the contract so designated as liquidated damages , contingent upon inability of the dealers of the buyers to book the prescribed number of vehicles, for remitting additional consideration. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-fulfillment of the contracted purchase in supplementary agreement between the appellant herein and M/s Volkswagen Group Sales India Pvt Ltd and M/s Audi AG, to the performed part of the contract. Central excise authorities initiated these proceedings, culminating in the impugned order [order-in-original no. 29/CEX/Commr./2013 dated 30th September 2013], against appellant who, in addition to manufacture of their own models of cars, also undertook production of Volkswagen and Audi brand cars of specific models under the agreement valid for five years for supply to dealers at prices arrived at by markup of fixed margin over cost of raw materials and manufacturing cost. In terms of the agreement, nonfulfillment of purchase commitment for each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the appellant submitted that as laid down by the Hon ble Supreme Court in Sales Tax Officer, Pilphit v. Budh Prakash Jai Prakash [[(1955) 1 SCR 243], agreement to sell is not a contract for sale. It was further contended that compensation/damages arising from breach of contract is a legal and statutory right under the India Contract Act, 1872 and not consideration for cars that were manufactured and sold by the appellant, that the payments so received is not in consequence of contract of sale but settlement for damage arising from non-fulfillment of the contract for which reliance is placed on the nature of such damages in Pollock Mulla The Indian Contract and Specific Relief Acts (14th edition) and of the decision of the Hon ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CESTAT]. It was pointed that the adjudicating authority did attempt to distinguish the said decision on the ground that these were rendered in the context of clearances prior 1st July 2000 before which section 4 of Central Excise Act, 1944 was centred on normal price and not transaction value for assessment. This, according to him, is erroneous in view of the judgment of the Hon ble Supreme Court in Commissioner of Central Excise v. Grasim Industries Limited [ 2018-TIOL-181-SC-CX-CB ] holding so. He further contended that the guidelines for CAS-4 of the Institute of Cost Accounts of India (ICAI) requires absorption of cost on normal capacity and not actual utilization; consequently the transferences of fixed cost on to the actual cost o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r delivery at the time and place of removal and to the extent that the assessee and the buyer are not related each other. There is no finding in the impugned order, or unearthing by investigation, that the details of the contract so designated as liquidated damages , contingent upon inability of the dealers of the buyers to book the prescribed number of vehicles, for remitting additional consideration. It is clear from section 4 of Central Excise Act, 1944 that any deviation from any of the elements enumerated therein would require treatment prescribed in Central Excise (Determination of Price of Excisable Goods) Rules, 2000. These several rules commence with the declaration that there is no option for determination of value other than by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar items relatable to such goods; (ii) value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar items used in the production of such goods; (iii) value of material consumed, including packaging materials, in the production of such goods; (iv) value of engineering, development, art work, design work and plans and sketches undertaken elsewhere than in the factory of production and necessary for the production of such goods. Explanation 2. - Where an assessee receives any advance payment from the buyer against delivery of any excisable goods, no notional interest on such advance shall be added to the value unless the Central Excise Officer has evidence to the effect that the advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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