TMI Blog2005 (4) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... month's average LME price. On the last day of the month, when the average price for that month becomes known, a final price circular is issued and the differential price payable or receivable for the clearances already effected in the course of the month is paid/received by issue of a supplementary invoice. The differential duty payable on the supplementary invoices is paid along with the amount of duty due for a particular month. 1.2 While most of the clearances to the local market are governed by the price circulars, there are several instances where such clearances are effected at further negotiated rates either on account of the buyer being an OEM or belonging to a separate class (such as exports or deemed exports). Appellant submits that the marketing and the pricing pattern that it follows is consistent with the industry practice. 1.3 Appellant were issued two identically worded show cause notices, dated 6-6-2003 and 12-8-2003, demanding differential duty aggregating to Rs. 10,68,80,155/- in respect of copper cathodes and rods cleared during the period May 2002 to June 2003 on the ground that in respect of certain clearances, appellant had failed to discharge duty liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56/- which was paid at the end of each month under supplementary invoices). The contentions urged for justifying the difference between the prices actually charged in the invoices and the price circulars have been rejected on the ground that sufficient documentary proof in the form of invoices, purchase orders, rejection slips etc. were not produced to justify the claim of the appellant that there were legitimate reasons for the difference between the prices as shown in the invoices and the price circulars. 1.7 During the hearings held before this Hon'ble Tribunal, the learned departmental representative made a submission that in regard to the clearances for deemed exports, the price charged by the appellant was not the sole consideration for the sale, as in addition to the price that the appellant recovered from the customer, it also received drawback in respect of the said clearances on the strength of a disclaimer issued by the buyer. It was explained that the buyer who held an advance licence permitting duty free import of its raw materials surrendered the said licence to the DGFT and obtained an Advance Release Order (ARO) against which supplies were effected by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice', even though sales were effected at varying prices to different buyers or class of buyers from factory gate or Depots etc. had to be determined. 5. The new Section 4 essentially seeks to accept different transaction values, which may be charged by the assessee to different customers, for assessment purposes so long as these are based upon purely commercial consideration for sale. Thus, it enables valuation of goods for excise purposes on value charged as per commercial practices rather than looking for a notionally determined value." have been over looked. (b) Since the burden of proving that the invoice price did not correctly reflect the price paid or payable for the goods, is entirely upon the department, the Commissioners in confirming the demand on the ground that all necessary documents such as purchase orders, invoices, goods rejection notes etc. had not been produced by the appellant in support of its defence contention that there were no legitimate reasons for the difference between the invoice price and the price circulars is not correct and cannot be upheld. Since the department has not discharged the initial burden of proof which lay upon it, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'additional consideration' flowing from the buyer to an assessee. This is further clear from the definition of "transaction value" in Section 4 now which states that such value refers to a price actually paid or payable for the goods and includes "any amount that the buyer is liable to pay to, or on behalf of the assessee". This position has also been clarified in para 22 of the Board Circular No. 354/81/2000-TRU, dated 30-6-2000. In the case before us no such consideration is flowing from the 'deemed export' buyers. No material exist of a nexus between the Depressed Price to such buyers the Drawback to be paid by the DGFT is brought out. (iii) Tribunal's decision in the case of IFGL Refractories Ltd. v Commissioner of C.Ex, Bhubaneswar-II, 2001 (134) E.L.T. 230, wherein it was held that statutory benefits allowed by statutory authorities cannot be considered as additional consideration flowing to a manufacturer from the buyer. The said decision of the Tribunal was rendered in very similar circumstances, as would be evident from para 2.2 and 2.3 of that order, which sets out the factual backdrop. After considering the decided case law on the subject, the Hon'ble Bench came t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is supplied) Similar view have been expressed by the Hon'ble Tribunal in the following decisions : - Universal Wires Industries v. Collector of Central Excise, Patna - 1996 (88) E.L.T. 528 (T) - Brindavan Beverages Ltd. v. Commissioner of C. Ex., Bangalore - 2001 (135) E.L.T. 766 (T) (iv) In the case of Tata Refractories Limited v. Commissioner of Central Excise Customs, Bhubaneswar - 2002 (141) E.L.T. 460 (Tri.), wherein the assessee was recovering an extra amount of Rs. 6,500/- per MT by raising a supplementary bill on its customer (SAIL). In the facts of that case, the Tribunal came to a conclusion that since an additional consideration of Rs. 6,500/- per MT had actually flown from the buyer (SAIL) to the manufacturer (Tata Refractories Ltd.), the said amount was additional consideration liable to be included in the assessable value. The facts prevailing in Tata Refractories' case where there was evidence of a consideration from the buyer to the assessee, are entirely different from the facts in the present case, where there is no flow of any additional consideration from the buyers to the assessee. Ld. Jt. CDR's reliance on this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an bidders in international tender. They are not in respect of trade transactions. Therefore, it cannot be said to flow as a consideration, whether direct or indirect, in respect of a sale made by the assessee to a buyer." (f) In respect of the remaining three categories of the clearances, i.e. clearance for replacement of rejected consignments, special contract rates from the customers and clearance of previous months' contract (spill over), it was submitted that appellant's case is clearly covered by paras 4 and 5 of the Board's Circular No. 354/81/2000-TRU, dated 30-6-2000 which clarifies that the new Section 4 seeks to depart from the erstwhile system of valuation based on 'normal wholesale price' by accepting different transaction values that may be charged by an assessee to different customers as long as these different values are based on purely commercial consideration where the buyer and seller have no relationship and the price is the sole consideration for sale. Para 5 of these instructions concludes by stating, "thus it enables valuation of goods for excise purposes on value charged, as per commercial practices rather than looking for a notionally determined valu ..... 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