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2019 (11) TMI 9 - AT - Central ExciseValuation - inclusion of royalty charges in the assessable value - Royalty Charges for technical knowhow was paid during the period 2012-13 to 2014-15 - captive consumption - HELD THAT:- As per facts of the present case, the consumption of excisable goods is not for captive consumption but for home consumption and on principal to principal sale basis. Therefore, the guidelines relied upon by the department has no relevance in the present case. Now, coming to the facts that whether the transaction value at which goods were sold and excise duty was paid, included the Royalty Charges paid by the appellant to the foreign collaborators - The appellant, time and again maintained that the Royalty Charges is clearly included as Sales and Distribution Overheads. Therefore, there is no doubt that the Royalty Charges is included in the overall value of the excisable goods. After the amended valuation provisions, from 2000 onwards, the duty is chargeable on the actual transaction value at which the goods are sold and therefore, any overhead charges cost of manufacture or selling expenses, everything stand included in the transaction value of the finished goods. Therefore, only expenses on account of Royalty Charges not shown in the cost of manufacture of the product will not make any difference as the same is admittedly stand included as Selling and Distribution expenses in the overall transaction value - It is also evident from the Chartered Accountant’s that Royalty Charges paid to foreign company stand included in the transaction value. The SCN also admit that the Royalty Charges is shown as Sales & Distribution overhead in the appellant’s books of account. This itself proves that the Royalty Charges is indeed included in the transaction value. Appeal allowed - decided in favor of appellant.
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