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2021 (3) TMI 730 - AT - Central ExciseMethod of Valuation - assessable value adopted for payment of duty is lower than the actual cost of manufacture of said products - whether valuation to be done in terms of Section 4(1)(a) of the Central Excise Act, 1944 (the Act), but under Section 4(1)(b) of the said Act, read with Rule 8 and Rule 11 of the Central Excise Valuation Rules, 2000? - suppression of facts or not - time limitation - HELD THAT:- There is no dispute that the goods have been sold to the unrelated buyers and there is no flow back of additional consideration, as also have been specifically admitted by the learned Pr. Commissioner. On perusal of the clarifications issued by the CBEC vide Circular dated 15.01.2014, it is noted that the Board has accepted that mere sale of price lower than the manufacturing cost cannot be made the criterion to reject the transaction value unless the aspects such as the percentage of loss at which such sale takes place and the period for which such loss takes place, reasons of sale at such loss, etc. are examined to ascertain if there was any “extra commercial consideration”. The Board has also accepted the fact that the Apex Court in its judgement has observed that selling of final products below the manufacturing cost was intended to penetrate the market which also constitutes extra commercial consideration in the hands of the manufacturer. The appellant’s case is squarely covered by the ratio laid down by the Apex Court in the case of COLLECTOR OF C. EX., NEW DELHI VERSUS GURU NANAK REFRIGERATION CORPN. [2003 (3) TMI 100 - SUPREME COURT] wherein also, in identical facts and circumstances, the Department proposed to reject the transaction value for the reason that cost of manufacture was found to be higher than the price at which goods were eventually sold. The Apex Court taking note of the fact that when there was no additional consideration and the goods were cleared to independent buyers, upheld the valuation adopted by the assessee under Section 4(1)(a). There are no positive evidence to show that there is any fraud or willful suppression on the part of the appellant and hence, the demand is clearly barred by limitation - appeal allowed - decided in favor of appellant.
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