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CCE, Salem Versus M/s. SAIL Refractory Company Ltd. And Vice-Versa

2015 (10) TMI 2399 - CESTAT CHENNAI

Demand of differential duty - valuation - whether the amount received as bonus by the appellant-assessee from its buyers for the performance of converter bricks/refractory bricks would be included in the assessable value of the refractory bricks sold by the appellant-assessee - Held that:- Refractory bricks were sold by the appellant-assessee based upon the terms and conditions as envisaged in the purchase orders. In the purchase order it is specifically stipulated for performance guaranteed bon .....

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CESTAT BANGALORE), CCE, Chennai Vs. VRW Refractories (2008 (7) TMI 647 - CESTAT, CHENNAI), Jalan Refractories (P) Ltd. Vs. CCE, Jaipur (2000 (9) TMI 192 - CEGAT, CHENNAI) and Indian Telehpone Industries Vs. CCE, Cochin (2004 (8) TMI 210 - CESTAT, BANGALORE), has consistently held that subsequent dealings between the assessee and the buyer on account of performance or otherwise of the goods is not of any concern in regard to the sale price of the goods at the time of removal. We are, therefore, .....

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mi, Technical Member And Shri P. K. Choudhary, Judicial Member For the Petitioner : Ms. L. Maithili For the Respondent : Ms. Indira Sisupal, AC (AR) ORDER Per P.K. Choudhary The assessees have filed five appeals and the Department has filed one appeal against the orders passed by the Commissioner (Appeals). 2. As the issue involved is common in all these appeals, with the consent of both sides, all the six appeals are taken up together for hearing and disposal. 3. The impugned orders and the per .....

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31,11,204/- 36,97,793/- E/40776/2014 25/2014 dt. 22.1.2014 April 2011 to March 2012 74,14,521/- 7,63,696/- 4. These appeals are in the nature of demanding differential duty on the bonus payments received by the assessee from its buyers with respect to clearance of refractory bricks on the ground that bonus claims were in the nature of additional consideration for the refractory bricks. 5. The brief facts of the case are that the appellant, M/s. SAIL Refractory Company Limited (formerly known as .....

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reements with its buyers, incorporating a penalty clause and a bonus clause. In terms of the penalty clause, if the bricks do not perform within the guarantee period or do not withstand the number of heats guaranteed, the buyers would be entitled to charge penalty as stipulated in the agreement. Conversely, if the refractory bricks outperform the guarantee period or function beyond the stipulated heats, the appellant-assessee would be entitled to bonus charges based on the number of heats the re .....

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ce the same are not includible in the assessable value. She also referred to the copies of the purchase orders from Steel Authority of India Limited, Visvesvaraya Iron and Steel Plant, Bhadravati along with Annexures to the purchase order which enumerates the terms and conditions. In para 3.2 of the Terms and Conditions, it is mentioned that the minimum guaranteed life of the converter lining shall be 1200 heats, Guarantee Certificate for the minimum guaranteed life should be provided by you, p .....

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he life achieved is lower than the minimum guaranteed life, penalty would be levied for shortfall for number of heats. Further she submitted that in view of the terms and conditions of the purchase order, bonus or penalties on the basis of quality of goods are not concern with the sale price at the time of removal of the goods and hence are not includible in the assessable value as they are post-sales provisions. Central Excise duty is levied at on the normal price, at which the goods are ordina .....

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ng the Departments appeal, she reiterated the findings of the Commissioner (Appeals). 8. Learned AR for Revenue in respect of the assessee s appeal reiterated the orders of the Commissioner (Appeals). Regarding the Department s appeal, she reiterated the grounds of appeal. She further submits that the transaction value has been defined under section 4(3)(d) of Central Excise Act, 1944 to include any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in co .....

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o. 354/81/2000-TRU dated 30.6.2000 has clarified that any amount collected in connection with the sale of the excisable goods whether realized before or after the removal of the excisable goods shall be included in the transaction value and duty to be paid accordingly . The above circular without any ambiguity states that any amount collected by the appellants in connection with the sale of the excisable goods should form part of transaction value and the appellants are liable to pay duty on suc .....

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ter bricks/refractory bricks would be included in the assessable value of the refractory bricks sold by the appellant-assessee. It is an undisputed fact that the refractory bricks were sold by the appellant-assessee based upon the terms and conditions as envisaged in the purchase orders. In the purchase order it is specifically stipulated for performance guaranteed bonus which indicated that the appellant-assessee should stand guarantee for the number of heat per set as per the agreements and bo .....

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