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2015 (5) TMI 594 - PUNJAB & HARYANA HIGH COURT

2015 (5) TMI 594 - PUNJAB & HARYANA HIGH COURT - 2015 (325) E.L.T. 658 (P & H) - Waiver of pre deposit - Valuation of goods - dealers of Maruti Suzuki are charging price over and above the ex-showroom price from the ultimate customers of the vehicles - whether part of the promotional discount paid from the dealer's margin is includible in the assessable value for the purpose of payment of central excise duty or not - Held that:- Once the whole issue prima facie has been considered by the Tribuna .....

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on and therefore, in the absence of any question of law arising, this Court would not interfere in the discretion which has been exercised, keeping in view the facts and circumstances of the present case - Under Section 35G of the Act, this Court would only interfere if there is a substantial question of law involved and the appeal is only to be heard on the questions so formulated. Keeping in view the above discussion, this Court is of the opinion that the substantial questions of law which hav .....

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respondent. JUDGEMENT G. S. Sandhawalia J. 1. This judgment shall dispose of CEA Nos.93 & 94 of 2014, filed under Section 35G of the Central Excise Act, 1944 (for short, the 'Act'), filed by the manufacturer, since common questions of law and facts are involved and by a common impugned order passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short, the 'Tribunal') dated 15.10.2014 (Annexure A-1), the lis has been decided. 2. The Tribunal, vide .....

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deposit ₹ 150 crore out of ₹ 240 crore (approx) demand as a precondition to hear the Appeal on merits when the entire case is covered in favour of the Appellant by rulings of the Hon'ble Supreme Court and the Bombay High Court? (ii) Whether in facts and circumstances of the present case the Appellate Tribunal is correct in directing the Appellant to make a pre-deposit as a pre-condition to hear the Appeal on merits when the entire case is covered by order of the Appellate Tribuna .....

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and issues which were never part of the proposed demand in the Show Cause Notice? (iv) Whether in facts and circumstances of the present case the Appellate Tribunal is correct in directing the Appellant to make a pre-deposit when substantial period of demand is time barred nd beyond the period of limitation? 4. A perusal of the paper book would go on to show that vide a show cause notice dated 19.06.2009 (Annexure A-7) and five other notices, the Revenue, on the basis of an audit conducted from .....

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ave the names and telephone numbers of the dealers through whom the schemes could be availed. After going through the advertisement and investigation done on the ground that the show cause notice was got issued on the ground that the promotional schemes should be included in the assessable value, as per the definition of transaction value, given under Section 4(3)(d) of the Act, which provided for determination of demand of customs or the central excise duty of transaction value. Investigations .....

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transaction/assessable value. Accordingly, quantifying the total discounts given by the manufacturer and the central excise duty payable on the same, the said show cause notice was issued. 5. The defence taken by the appellants was that whatever discounts were passed to the end consumers as the customers had bought the vehicles from the dealers and had got maximum savings and no loss had been incurred by the dealers. The discounts were advertised and known prior to the removal of the goods. Rel .....

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to the facts and time-barred. 6. The adjudicating authority, vide order dated 10.01.2013 (Annexure A-9), by taking into account the defence of the appellants, came to the conclusion that the period relates to the evaluation of vehicles from June, 2004 to March, 2012. The provisions of Section 4(3)(d) of the Act were taken into consideration to hold that the discounts given by the dealers of the manufacturer would be includible in the assessable value of the goods. The objection raised by the ap .....

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wilfully mis-stated that the promotional scheme had been launched and rather the promotional schemes were formulated and launched by the manufacturer and therefore, proviso under Section 11A had been rightly invoked. Resultantly, the dealers' contribution and consumers' promotion scheme provided from the dealers' margins had been included in the assessable value, which was quantified as ₹ 15,70,21,54,908/- and the central excise duty was quantified at ₹ 240,57,84,802/-. .....

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d. Vide the impugned order, the Tribunal came to the conclusion that the only issue involved was whether the amount of dealers' margin which had been offered as part of the promotional discount, was includible in the assessable value, for the purpose of payment of central excise duty or not, in view of the definition of Section 4(3)(d) of the Act, wherein, transaction value had been defined. It was, accordingly, held that it would form part of the assessable value of such goods and would be .....

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pre-delivery inspection and three free after sale services were also part of the price of goods. The judgment of the Bombay High Court in Tata Motors Ltd. Vs. UOI 2012 (286) ELT 161 (Bom.), was referred to but not taken into consideration on the ground that the appellant would be provided opportunity to argue on its ratio during regular hearing. Other judgments relied upon were rejected on the ground that the transaction value came into force w.e.f. 01.07.2000 and the judgments were prior to th .....

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rom handling charges, collected by the dealers, indirectly and thus, the appellants were undervaluing the excisable goods while delivering to the dealers. 9. Counsel for the appellants has, thus, submitted that in view of the judgment of the Bombay High Court in Tata Motors Ltd. (supra), the circular dated 01.07.2002 had been quashed and therefore, while placing reliance upon Benara Sales Ltd. Vs. Commissioner of Central Excise 2006 (207) ELT 513, argued that once a prima facie case was made out .....

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of the amendment made in the section, the transaction value would include the value of the concession given by the dealers and the interest of the Revenue was to be protected. In the absence of any financial hardship being faced by the appellant-company, the discretion exercised by the Tribunal is not lightly to be interfered with, in the facts and circumstances and out of the ₹ 240,57,84,802/- of duty along with penalty of the equivalent amount and interest etc., only a sum of ₹ 150 .....

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n or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied : Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or pe .....

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he price paid or payable for the goods once sold. The same has been held to be inclusive of the amount charged, which the buyer of the vehicle is liable to pay, in connection with the sale and whether the same is payable at the time of the sale regarding advertisement marketting and selling expenses. The factum of the issue being decided against the assessee itself by the larger Bench of the Tribunal in Maruti Suzuki India Ltd. (supra), is also not disputed wherein the point taken into considera .....

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s, such value shall - (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. xxxx xxxx xxxx (d) transaction value means the price actually paid or payable for the goods, when sold .....

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e amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. 13. As regards the judgment of the Apex Court in Bombay Tyres International Ltd. (supra), the Tribunal noticed that the amendment to Section 4 which came into force on 01.07.2000, incorporating the value of the excisable good, for the purpose of charging the duty on excise to the transaction value and as per their definition, the price actually paid would include in addition to the pri .....

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assessable value. The Court came to the conclusion that the circulars issued by making reference to Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, had wrongly been invoked and linked with the expenses of publicity. Clause 7 of the circular dated 01.07.2000 was, accordingly, held to be not in conformity with the provisions of Section 4(3)(d) and accordingly, held to be illegal and void. That the pre-delivery inspection and free further sales servic .....

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e said judgment is without any basis. 15. Once the whole issue prima facie has been considered by the Tribunal and has been decided against the appellants, the Tribunal, thereafter, has given the benefit of reducing the deposit to the tune of ₹ 150 crores, out of the duty of ₹ 240,57,84,802/-, levied along with equal amount of penalty plus interest. Though the Tribunal also took into account the handling charges issue, which was not subject matter of the notice, but it has on merits .....

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