TMI Blog2010 (10) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... fiable under the same chapter heading, it does not permit the Tribunal or the statutory authorities to expand the scope of exemption notification Regarding the limitation - The investigation carried out by the department revealed for the first time on perusal of the invoices on 12-7-2002 that the appellants had not included the cost of the drum supplied by the buyers of the malto dextrine in the assessable value of the final product Regarding penalty - the various decisions delivered by the different Benches of the Tribunal were contrary to the view taken by the Larger Bench of the Tribunal on the point of concept of the transaction value - Appeal is partly allowed - E/2054 of 2005 - 791/2010-EX(PB) - Dated:- 27-10-2010 - Justice R.M.S. Khandeparkar, Shri Rakesh Kumar, JJ REPRESENTED BY : Shri J.P. Kaushik, Advocate, for the Appellant. Shri I. Baig, DR, for the Respondent. [Order per : Justice R.M.S. Khandeparkar, President (Oral)]. - Heard the learned Advocate for the appellants and DR for the respondent. 2. This appeal arises from order dated 4-3-2005 passed by the Commissioner (Appeals), Ludhiana. By the impugned order, the appeal filed by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 (164) E.L.T. 257 (Tribunal), Filament India Ors. v. CCE, Jaipur Anr. reported in 2003 (57) RLT 750 (CEGAT-Del.) = 2003 (160) E.L.T. 314 (Tribunal) and TCP Limited v. CCE, Madurai reported in 2008 (84) RLT 119 (CESTAT-Che.) = 2008 (227) E.L.T. 109 (Tribunal). According to the learned Advocate for the appellants even though the said decisions are in relation to the period prior to 1-7-2000, the same principle would apply even in relation to the subsequent period, and this is clear from the decision of the Tribunal. He further submitted that even assuming that the appellants are not justified in claiming necessary benefit of the said provision of law and the said decisions, at the relevant time, there was a Notification No. 313/1977-C.E., dated 8-11-1977 amended from time to time, which clearly exempted the product of Liquid Glucose from duty liability. The liquid glucose and malto dextrine syrup both classifiable under chapter sub-heading 1702.29, being so, the appellants in any case could be entitled to avail the benefit of the said notification in relation to the product in question. He further submitted that the respondent were fully aware of the fact that the appellants wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Section 4 of the said Act. The items which are required to be includible in the transaction value while ascertaining the assessable value of a final product has been elaborately discussed by the Larger Bench of the Tribunal in Maruti Suzuki India Ltd. case and needs no further elaboration. The following paras from the said decision clearly brings out the scope of the transaction value for the purpose of ascertaining the assessable value :- 15. The definition of the expression transaction value undoubtedly uses the expression any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including ....... servicing, warranty, commission or any other matter,...... Apparently, the transaction value does not merely include the amount paid to the assessee towards price but also includes any amount a buyer is liable to pay by reason of or in connection with the sale of the goods, including any amount paid on behalf of assessee to the dealer or the person selling the vehicles. Measure of levying is expanded and its composition is broad based to bring all tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n explains that the inclusion of identified items does not mean that they are restricted or limited to those which are specifically identified. In this inclusion part of definition, the legislature has used the word any amount at two places, thereby clearly disclosing the extensive nature of the definition. Thereafter, the definition clause specifically identifies the items which stand excluded from the transaction value, which is absolutely restrictive in nature. 18. On the whole, the definition of the expression transaction value is neither restrictive in nature nor exhaustive but illustrative and inclusive. The definition clause uses terms like means , includes , including, but not limited to , and but does not include . The word includes has been suffixed by the phrase in addition to . Apparently, it is a definition of extensive nature and at the same time it is restrictive and exhaustive in relation to the items to be excluded therefrom. It discloses to be of vary wide and extensive in nature and it is evident from the use of the expressions like includes in addition to and including but not limited to . At the same time, it precisely pinpoints the items whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of profit to the dealer and may be a subject matter of assessment for the purpose of direct taxes. However, in relation to the manufacturer, it would be an indirect consideration received by the assessee in relation to the clearance of the product manufactured by him. 21. The term sale used in the definition clause should not be misunderstood as having used, otherwise than to identify the stage at which the product is cleared to the customer i.e. the buyer thereof and the price element which is to be considered for the purpose of deciding the issue relating to the assessable value of the manufactured goods. It essentially denotes the total consideration payable by the buyer for the product which is to be considered while calculating the assessable value of the goods for the purpose of determining the duty liability under the said Act. It is totally different from the liability relating to sale tax. This is apparent from the scheme of the Act as well as the intent and spirit of the Section 4 itself. 22. Section 4(1) (a) of the said Act provides that where under the said Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portioned as appropriate, of the following goods and services, whether supplied directly or indirectly by the buyer free of charge or at reduced cost for use in connection with the production and sale of such goods, to the extent that such value has not been included in the price actually paid or payable, shall be treated to be the amount of money value of additional consideration flowing directly or indirectly from the buyer to the assessee in relation to sale of the goods being valued and aggregated accordingly, namely :- (i) value of materials, components, parts and similar items relatable to such goods; (ii) value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar items used in the production of such goods; (iii) value of material consumed, including packaging materials, in the production of such goods; (iv) value of engineering, development, art work, design work and plans and sketches undertaken elsewhere than in the factory of production and necessary for the production of such goods . Referring to the Explanation 1 of the said rule, it was sought to be contended that under clause (iii) thereof it refers to the packa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the DR, the authorized signatory of the appellants had clearly admitted in his statement dated 12-5-2003 that the appellants had not disclosed to the department the practice followed by the appellants of non-inclusion of the cost of packing material supplied by the buyers in the assessable value of the product. The investigation carried out by the department revealed for the first time on perusal of the invoices on 12-7-2002 that the appellants had not included the cost of the drum supplied by the buyers of the malto dextrine in the assessable value of the final product. In that regard, the department was right in invoking the extended period of limitation. 11. The appellants also had contested the claim regarding interest and penalty. However, as far as interest amount is concerned, the statutory provisions are very clear in that regard. Law in that regard has also been well settled by the Apex Court decision. 12. As regards penalty is concerned, the learned Advocate for the appellants is justified in contending that the various decisions delivered by the different Benches of the Tribunal were contrary to the view taken by the Larger Bench of the Tribunal on the point of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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