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2013 (12) TMI 81 - AT - Central ExciseCompensation for delay to be included in the assessable value u/s 4 of central excise act or not after 01-07-2000 – Held that:- The provision in the contract, for variation in the price by application of the clause, was related to liquidated damages and the same is in the nature of a compensation payable for delayed delivery in the supply of goods and not in the nature of penalty - The Tribunal concluded that in terms of the definition of "transaction value", duty is payable only on the price arrived at by taking into account the liquidated damages - Section 4 read with the definition of "transaction value" in Section 4 (3) (d) enables levy of duty on the transaction value paid or payable for the goods - The value payable in a case where liquidated damages is applied would therefore be the consequent value and this would constitute the "transaction value". Following United Telecom Ltd. Vs CCE Bangalore [2006 (9) TMI 321 - CESTAT, BANGALORE] - Post the amendment of Section 4 and the statutory definition of ‘transaction value' in sub-section (3) (d) of the Act - the eventual value payable after factoring in any liquidated damages contractually stipulated for delayed supply would be the transaction value and this value would be the value relevant for levy of duty - wherever the assessee, as per the terms of the contract and on account of delay in delivery of manufactured goods is liable to pay a lesser amount than the generically agreed price as a result of a clause, stipulating variation in the price, on account a the liability to "liquidated damages", irrespective of whether the clause is titled "penalty" or "liquidated damages", the resultant price would be the "transaction value" - such value shall be liable to levy of excise duty, at the applicable rate.
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