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2023 (2) TMI 6 - AT - Central ExciseValuation of excisable goods - consideration received by the appellant from Honda India under the guise of compensation was liable to be included in the transaction value of goods or not - extended period of limitation - HELD THAT:- It is clear from the order passed by the Commissioner (Appeals) that even though the agreement between the applicant and the Honda India did not have a condition for payment of compensation if the goods manufactured by the applicant were not received by the Honda India, yet the applicant paid compensation for non-lifting of such goods. The Commissioner (Appeals) also noted that the goods were specifically manufactured for Honda India for its 2CV Model, yet they were sold as scrap and that perusal of the sample invoices showed that the buyers of the goods were not scrap dealers - it was a business arrangement between the applicant, Honda India and the buyers to evade payment of excise duty. In other words, the arrangement between the appellant and Honda India was such that the goods would be sold at a lesser price by declaring them as scrap and the balance amount would be paid by Honda India by terming the amount as “compensation‟. Thus, the amount received towards so called “compensation‟ was to be included in the transaction value. The Tribunal also recorded such a finding and the Supreme Court has confirmed this finding. The amount received by the applicant from Honda India was not even shown in the ER-I Returns filed by the applicant. Much emphasis has been placed by the learned counsel for the applicant on the balance sheet of the applicant for the financial year 2011-12. All that is recorded in the said balance sheet is “compensation from customers- Rs.49,156,375/-“. It cannot be gathered from this statement in the balance sheet that this amount was received by the applicant from Honda India towards compensation for the cancellation of the agreement to supply the spare parts which were ultimately sold as scrap. The finding of the Tribunal that it transpires from the business arrangement between the appellant, Honda India and the buyers of scrap that the appellant had received some amount from the buyers of scrap and some amount from Honda India for the value of the auto parts sold by the appellant has been confirmed by the Supreme Court in the judgment and order dated February 14, 2022. The extended period of limitation contemplated under section 11A (4) of the Excise Act was, therefore, correctly invoked in the facts and circumstances of the case. Application dismissed.
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