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C.C.E. DELHI-III Versus M/s HITKARI FIBRES LTD.

2015 (10) TMI 357 - SUPREME COURT OF INDIA

Valuation - price escalation clause - levy of interest on differential duty - Demand of interest u/s 11AB - Whether the interest was not leviable under Section 11AB of the Act particularly in view of the fact that the price indicated in the purchase orders were final during the period of supply of goods - Held that:- Time when the goods were cleared, the price which was charged from M/s. Maruti and the duty was paid on the said price. No doubt, some additional amount is received thereafter, on a .....

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owever, in any case, the inquiries were made from M/s.Maruti and therefore, the concerned officer could find out from M/s. Maruti as to under what circumstances, price escalation was given and whether that was a factor contributing to the depression of price at the time of clearance of the goods. - it is difficult to hold that the aforesaid additional amount received at a subsequent stage was to be added for the purpose of arriving at the transaction value. - Decided against Revenue. - CIVIL APP .....

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as M/s. Maruti Udyog Limited, Gurgaon, (hereinafter referred to as M/s. Maruti) to whom the assessee had been supplying these non-wooven carpets. The aforesaid product is exigible to excise duty and the assessee was clearing the product on the payment of excise duty as per the invoices raised on sale of this product to M/s. Maruti. It so transpired that the assessee received additional amount on account of price escalation during the period 1996-1997 to 2000-2001. However, this was not intimated .....

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paid to the respondent-assessee on account of price escalation. As per M/s.Maruti, a sum of ₹ 55,48,971.75/- was paid to the assessee during the period from 1996-1997 to 2000-2001 under the aforesaid Heading. It has resulted in the issuance of Show Cause Notice dated 04.01.2002 by the Adjudicating Authority, viz., Additional Commissioner of Central Excise (Anti Evasion), Delhi-III to the assessee under Section 11A of the Central Excise Act (hereinafter referred to as the 'Act') and .....

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referred to as 'CESTAT') contending that as per the provision of Section 11A of the Act, the ex-factory price at the time when the goods were cleared would be the transaction value and therefore, excise duty was rightly paid. In other words, what was contended was that the escalation price which was received subsequently could not be taken into consideration. The CESTAT has accepted the aforesaid plea of the assessee and in the process relied upon the judgment of this Court in 'MRF L .....

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STAT. He has relied upon another judgment of this Court in 'Commissioner of Central Excise v. International Auto Ltd. [2010 (250) ELT 3 (SC)] wherein the judgment in the case of MRF Limited (supra) was taken note of and discussed. It is argued that this Court in the said case has categorically held that after the amendment in Section 11A of the Act, the MRF Limited (supra) will have no application. We have gone through the judgment in International Auto Ltd. (supra). In that case, the issue .....

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