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2006 (9) TMI 321 - AT - Central ExciseRefund claim u/s 11B - deduction from the “transaction value” as per Section 4(3) - difference in price quoted in the purchase order and invoices under the cover of which goods were cleared - Liquidated Damages - penalty imposed by the customer for delayed delivery of goods - HELD THAT:- From the above definition of Section 4(3)(d), we find that the transaction value represents price actually paid or payable for the goods. Even though a price is fixed for the goods, as per the contract the goods should be delivered on a particular date and when there is delay in delivery, the price is reduced depending on the delay. As a result of above adjustments, the appellant has received lesser payment of transaction value. When the price at which the goods are transacted has to be taken, there is no question of any deduction. Due to the provision of liquidated damages, the price actually payable is reduced and it is the reduced price which is to be taken for Central Excise duty purposes in the light of the definition of transaction value. Thus, we find that the liquidated damage is 0.5% of the invoice value per week of delay. Considering the quantum of the liquidated damages and taking into account the submissions of the learned Advocate on the nature of the liquidated damages, we are of the view, that it is in the nature of compensation payable for delay caused in the supply of goods, not in the nature of penalty. Therefore in terms of the definition of transaction value, duty is payable only on the price arrived at by taking into account the liquidated damages. Hence we allow the appeal with consequential relief.
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