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2010 (8) TMI 316 - AT - Central ExciseValuation – dummy units – It is unconceivable that a manufacturer of aerated waters and concentrate syrups, whose marketing requires considerable expense and financial investment, would hand over the same to firm/company owned/controlled by uneducated persons without any financial capacity and without any experience of marketing of such products and that too, without any formal legally binding agreements and without taking any security from them. From the above facts, it is clear that it is the DKDBL who are the real persons behind PKD, CKD and RSPL. CKD, PKD & RSPL do not have independent existence but are mere extensions of DKDBL and transactions between DKDBL and CKD, PKD & RSPL are not on principal to principal basis. As there is huge difference between the price at which DKDBL sell the goods to CKD, PKD & RSPL and on which duty is paid by DKDBL and the price at which CKD, PKD & RSPL sell the goods to independent buyers, it is clear that these firms/company have been created by DKDBL to depress their assessable value. We, therefore, hold that for assessment of duty on BIBs manufactured and cleared by DKDBL, it is the price charged by CKD, PKD & RSPL from their buyers after permissible deductions, if any, which will be the assessable value of the goods and not the price at which DKDBL are showing the sale of BIBs to CKD, PKD & RSPL. , Commissioner’s order accepting the DKDBL’s price to PKD & CKD as the correct assessable value, and dropping the duty demand of Rs. 7,98,27,724/-, even though not challenged by the Department, is not correct and the same cannot be the basis for accepting DKDBL’s price to PKD, CKD and RSPL in respect of BIBs as the correct assessable value. As regards, the extent of deduction to be allowed in respect of PMX machines rental & repair/maintenance charges, while the same has to be allowed on actual basis, the evidence regarding, the quantum of deduction claimed and its correctness has to be produced by the appellant. With regard to correctness of the amount claimed as PMX machine rental, we are of the view that the same must be comparable with amortised value per BIB of the PMX machine plus reasonable profit margin of the machine owner renting the machine. Period of limitation - since the facts regarding real nature of transaction of DKDBL with PKD, CKD & RSPL came to the knowledge of the Department only after a departmental investigation, longer limitation period under proviso to Section 11A(1) of the Excise Act, 1944 would be available to the Department for recovery of short paid duty and for the same reason, the provisions of Section 11AB and Section AC would also be attracted. Qquantification of duty demand - the assessable value has to be determined by permitting from the price list price, the deductions of (a) taxes actually paid; (b) cash and quantity discounts, if any, given to customers; (c) outward freight from the premises of PKD/CKD/RSPL to their customers’ premises; (d) rental and repairs & maintenance expenses of PMX machines if the same are included in the price charged. No deduction of salary & wages towards distribution is to be permitted. However, the evidence regarding the trade discounts given to the customers and their quantum, taxes paid, quantum of outward freight from the premises of PKD/CKD/RSPL to the customers’ premises and rental/repair & maintenance expenses PMX machines and correctness of the PMX machine rentals has to be produced by the appellants for claiming their deduction from the sale price of PKD/CKD/RSPL.
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