9911796707
TMI Blog2002 (2) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... receiving advances against supply of HDPE/PP Woven sacks/bags from their buyers M/s. Oswal Chemicals & Fertilizers Limited and adjusting the said advances at the time of their delivery. Therefore, they were issued a show notice dated 2-2-2001 in which it was alleged that during the period from March, 1998 to February, 2000, they had received the money advances from the said buyers and driven the benefit to the extent of interest earned on such advances as the assessee would have incurred the interest had they borrowed the same amounts from the banks or any other financial sources. As such, the notional interest earned/accrued to the assessee on advances is an additional consideration in terms of Rule 5 of the Central Excise (Valuation) Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsecured loans from M/s. Oswal Chemicals & Fertilizers Ltd. as under :- Sr. No. Amount (Rupees in Crore) Date of receipt of loan 1 One 07.11.97 2 One 09.12.97 3. One 29.12.97 4. One 27.01.98 5. One Jan., 1999 3. They contended that 75% of their production was being sold to M/s. Oswal Chemicals & Fertilizers on the basis of prices contracted from time to time. They submitted that their sale transaction with this buyer did not involve any nexus between sale price and the loan given to them and there was no suppression in the assessable value. They further submitted that the rates charged by them from M/s. Oswal Chemicals & Fertilizers Ltd. for the bags supplied to them were more than the ones charged by them from other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposition of penalty. 4. On considering the above reply of the party, the Commissioner of Central Excise, Jaipur in her order dated 19-7-2001 rejected the defence submissions of the noticee party and observed that the goods manufactured by them were not in scarcity for which their buyer would feel bound to provide them advances or loans and that HDPE bags are easily available in the market on competitive prices for which no buyer would give advances or loans. It is further observed that the supply to M/s. IFFCO was made intentionally to claim benefit in case of exigency; that merely supplying goods to one more customer cannot prove that the prices charged from the buyer who had given them the loans were competitive prices unless the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 11A. She has further imposed a penalty of an equal amount on them under Section 11AC and a penalty of Rs. 10,000/- under Rule 173Q on the party apart from directing for recovery of interest on the confirmed amount of duty as per the provision of Section 11AB. 5. This appeal is against the impugned order of the Commissioner of Central Excise. We have heard Shri Jitendra Singh, ld. Advocate for the appellants and Shri M.M. Dubey, ld. JDR for the respondents. The ld. Counsel for the appellants does not dispute the facts as mentioned in the show cause notice and as considered in the impugned order of the Commissioner. He has reiterated the arguments advanced by the party before the adjudicating authority. He further submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtilizers Ltd. from different suppliers as also the supply made by the appellants to different buyers would indicate that there is no suppression of the assessable value in respect of the bags sold by them to M/s. Oswal Chemicals & Fertilizers Ltd. With regard to the application of extended period of time for demand, the ld. Counsel submits that they had filed a declaration of their marketing pattern for the year 1999-2000 as required under Rule 173C(3) on 13-4-99 with their Range Office and in which their reply to the query whether they were collecting from their customers any advances/ deposits or other valuable considerations and whether these advances/deposits were adjusted at the time of delivery of the goods, against the final price c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fertilizers Ltd. is rightly added in the assessable value of the goods sold to their buyers. We have carefully considered these submissions. In view of the fact appended in details above and the case laws relied upon by the appellants, we are of the view that the Revenue have not been able to discharge the burden cast on them to establish that by virtue of obtaining the advances/loans from M/s. Oswal Chemicals & Fertilizers Ltd., the value of the HDPE bags supplied by the appellants to the said party has resulted in depression of sale price. In the cited cases, it is very clearly held that the money value of additional consideration flowing from a buyer to the seller can only be added to the assessable value if such loans/advances have res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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