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2005 (4) TMI 58 - SC - Central ExciseIf the selling price of M/s. Nemaru "a related person" as defined in Section 4(4)(c) of the Central Excise Act, 1944 (for short "the 1944 Act") was considered as the basis of the assessable value in terms of proviso (iii) to Section 4(1)(a) for the goods manufactured and cleared by M/s. Akay Cosmetics Pvt. Ltd. (assessee herein), then was the claim for deduction from the assessable value in respect of cost of secondary packing (special packing), freight, handling charges, insurance, octroi, turnover tax and cost of bought-out items admissible under Section 4(4)(d) of the 1944 Act? Held that:- The demand for differential duty for the period 1/88 to 8/88 without issue of show cause notice under Section 11A was unsustainable. Absence of show cause notice was not disputed. In the circumstances, the Tribunal was right in setting aside the demand for differential duty amounting to ₹ 1,59,606.22 for the said period. Consequently, demand made for the said period under any of the seven items is set aside. To sum up, we hold, that, deduction for expenses incurred on account of special packing, turnover tax, octroi and bought-out items was admissible for the period 9/88 to 3/91, subject to the assessee submitting proof of incurring actual expenses in respect of the above items before the Commissioner (Appeals). That, the department was right in disallowing deduction for expenses on account of freight, insurance and handling charges for the period 9/88 to 3/91. We also do not see any reason to interfere with the impugned order of the Tribunal remanding the matter to the Commissioner (Appeals) to decide afresh the question of "related person" during the period 4/91 to 3/93, in view of the changed circumstances indicated hereinabove. The appeals filed by the department are partly allowed
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