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2016 (8) TMI 931 - CESTAT MUMBAI

2016 (8) TMI 931 - CESTAT MUMBAI - TMI - Enhancement of penalty - includability - penalty paid by the dealers of M/s.Skoda Auto India Pvt. Ltd. in the assessable value - Held that:- it is found that there is no evidence to show that the penalty amount received by the M/s.Skoda Auto India Pvt. Ltd. is in connection with the sale of goods by them to dealers. Therefore, the same cannot be included in the assessable value. The appeal filed by M/s.Skoda Auto India Pvt. Ltd. is therefore allowed and t .....

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through their dealers appointed for various geographical jurisdictions. In terms of agreement of M/s. Skoda Auto India Pvt. Ltd. with their dealers, the dealers were required to sell goods in their own geographical jurisdictions and in case they sold the goods in some other dealers in geographical jurisdiction, they were required to pay a penalty to the appellants. Such penalty was recovered through debit notes. Revenue sought to include the amount of penalty recovered from the dealers in the a .....

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appeal before the Tribunal seeking to enhance the penalty from ₹ 1,50,000/- to ₹ 9,09,718/-. SAIPL have filed cross objection seeking to dismiss the appeal filed by the Revenue and to restore the order of Commissioner (Appeals). SAIPL are also in appeal against the impugned order seeking to set aside the demand. 2. The learned Counsel for M/s.Skoda Auto India Pvt. Ltd. argued the case on merits and relied on the following decisions regarding includability of various charges in the as .....

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made. It is solely relatable to post sale breach of contract. 3. The learned AR for the Revenue cited various decisions of Tribunal on the merits of the case. He relied on the decision of the Tribunal in the case of Jamna Auto Industries Ltd. - 2004 (165) ELT 127 (Tri-Del). He also relied on the decision of Hon ble Supreme Court in the case of Sony India Ltd. - 2004 (167) ELT 385 (SC). 4. We have gone through the rival submissions. We find that the Revenue s appeal has been filed solely for enh .....

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es. The penalty is paid by the dealers if they sell the cars to the customers in a territory different from their own. As per contract between M/s.Skoda Auto India Pvt. Ltd. and the dealers, the dealers are required to sell the product within the geographical territory assigned to him. The nature of transaction is such that the penalty paid is in connection with the sale of goods by dealer to ultimate customer and not in connection with the sale of goods by M/s.Skoda Auto India Pvt. Ltd. to its .....

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m buyers is not includable in the assessable value. In the said decision, the Tribunal has observed as follows: 5. We have gone through the facts of the case and find that the facts are squarely covered by the case of Amco Batteries (supra). In the said case it has been observed that : 3. On a careful consideration, we notice that the Commissioner himself in para 5 has clearly noted that there is no written agreement. He draws conclusion from reply dated 9-3-2005 of the assessee, wherein they ha .....

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