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2015 (12) TMI 668 - SUPREME COURT

2015 (12) TMI 668 - SUPREME COURT - 2015 (326) E.L.T. 8 (SC) - Valuation - inclusion of interest and gains arising out of advance received against supplies - Misdeclaration of value - Held that:- Commissioner once again reiterated the conclusion of his earlier order which compelled the assessee to approach the Customs, Excise and Service Tax Appellate Tribunal again challenging the order of the Commissioner. The finding of the Commissioner was that the huge amount of customers' booking advances .....

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company or its profitability had no direct relevance to the dispute. It found that for excise valuation, the relevant consideration was as to whether the deposits had the effect of lowering the sale prices of the motorcycles or whether the sale prices were normal sale prices unaffected by the deposits.

It is clear that each and every aspect of the issue is examined, on the basis of which finding is arrived at that the price of the motorcycle manufactured by it were market driven and i .....

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Ganesh, Sr. Adv., Mr. P. K. Ram, Adv. And M/s. Temple Law Firm. ORDER The respondent-assessee is in the business of manufacturing motorcycles since 1985. On this product, the respondent has been paying excise duty at ad valorem basis. In July, 1991, a Show Cause Notice was issued to the assessee alleging that it had not declared correct value of motorcycles in the price lists and that evasion of duty had taken place. The period covered by the said notice was 1985-86 to 1990-91. The precise alleg .....

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ice of the motorcycle and thereby arrived at the valuation of the said motorcycles for the purpose of excise duty. In this manner, a differential duty of ₹ 2 cores along with penalty of ₹ 50 lakhs was demanded. Aggrieved by that order, the assessee filed appeal before the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as 'Tribunal') which was allowed by the it vide orders dated 06.10.1998. Against that order, the Department came in appeal befor .....

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show the opening and closing balance of the funds received under the capital Customers' Advances'. They show deployment of funds so received. The income accruing to the assessee was reflected in profit & loss accounts. For the year ending 31.3.1986 the outstanding balance under the above head was ₹ 33.40 crore out of which ₹ 28.90 crore was invested in various securities/deposits leaving a balance of ₹ 4.42 crore (see Schedule 4). The said schedule further indicates .....

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sale of units and income from units (schedule 10). Even the Report of the Directors under the head Financial Reports show that the profits of the company have been based on implication of Sales with Other Incomes. For example, for the year 1985-86, Sales & Other Incomes were of ₹ 49.20 crore(rounded to '0') out of which Income from Sales was ₹ 45.02 crore(Round to '0') whereas ₹ 4.06 crore was on account of other Income. Therefore, according to the adjudicat .....

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come on the investments from the advances was includible in the assessable value. This aspect has also not been considered by the Tribunal. For the above reasons, we hold that the tribunal has disposed of the appeal before it in a most perfunctory manner without going into any figures at all but by merely on the statement made by counsel and on the basis of material which appears to have been produced first time before the Tribunal. We, therefore, set aside the order of the Tribunal and remand t .....

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material which was placed before the Commissioner and not to allow any additional documents/ materials to be filed before it. None of our observations made herein shall bind the Tribunal to which this case is remitted. After remand, the Commissioner once again reiterated the conclusion of his earlier order which compelled the assessee to approach the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'Tribunal') again challenging the order of the Commissioner .....

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ee, noted that the overall effect of the deposit on the financial position of the company or its profitability had no direct relevance to the dispute. It found that for excise valuation, the relevant consideration was as to whether the deposits had the effect of lowering the sale prices of the motorcycles or whether the sale prices were normal sale prices unaffected by the deposits. After going through the material that was produced, it answered the aforesaid question in the negative which is ma .....

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