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2016 (11) TMI 574 - CESTAT MUMBAI

2016 (11) TMI 574 - CESTAT MUMBAI - TMI - Valuation - receipt of additional consideration through Debit Notes - Held that: - The debit notes raised by the respondent in the case in hand are equivalent to supplementary invoices. It cannot be the case that supplementary invoices raised by assessee in pursuance to the escalation clause despite increase in value, Central Excise duty is not payable. The same analogy will apply in the case in hand. In view of this we hold that the respondent is liable .....

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d that the issue is of interpretation of the provisions of Section 4 hence the question of visiting the respondent with penalty does not arise. - The appeal is disposed of partly in favour of the assessee and partly in favour of the Revenue. - Appeal No. E/3786/05 - Order No. A/90751/16/EB - Dated:- 5-10-2016 - Mr. M.V. Ravindran, Member (Judicial) and Mr. C.J. Mathew, Member (Technical) Shri Ajay Kumar, Jt. Commr (AR), for appellant Shri Rajesh Ostwal, Advocate, for respondent Per: M.V. R .....

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recorded the same in the account book as amount receivable from IVO Power Engineering Ltd. During the scrutiny of the balance sheet and ledger account it was noticed by the lower authorities that the respondent had to discharge the Central Excise duty on such debit note raised holding that the definition of transaction value applies. Showcause notice was issue for demand of duty for the period April 1999 to March 2003. The adjudicating authority after following due process of law confirmed the d .....

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s increased the weight of the towers and hence the cost and value goes up for which debit notes are raised. It is his submission that though the contract value is fixed the assessee respondent has in the contract recorded the final sum shall be determined in accordance with the terms and conditions of the contract. Hence the provisions of Section 4 of Central Excise Act, 1944 will apply. He would read the definition of transaction value and submit that the price actually paid or payable for the .....

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ble High Court of Commissioner of Income Tax v. Ganesh Builders 1979 116 1 TR 911 (Bom) for the proposition that once there is a debit note raised and recorded in the accounts book in relation to the sales made. He Hindustan Shipyard Ltd. 1987 (28) ELT 586 (Tri.) would also rely upon the decision of v. Commissioner of Central Excise for the proposition that when there is determination of the final price. 4. Learned Counsel appearing for the respondent would draw our attention to the facts of the .....

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en amended from 01.07.2000 there is no material difference for the purpose of valuation. Hence the definition of transaction value when read clearly indicates that the phrase "actually paid or payable" is the situation wherein the customer agrees to pay the said amount thereby actually claimed is correct. In the absence of actionable claim the judgement of Apex Court in the case of Purolator India Ltd - 2015 (323) ELT 227 (S.C.) will cover the issue their favour which holds that the ex .....

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n the case in hand the purchasers has not acknowledged the debt as the debit note issued by the respondent is still not acted upon. 5. We have considered the submission made at length by both sides and perused the records. The issue that falls for consideration is whether during April 1999 to March 2003, the amount which has been indicated in the balance sheet as amount payable has to be considered as additional consideration and Central Excise duty is demandable or otherwise, 6. Undisputed fact .....

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cords of the respondent as due from the purchasers. Since the period involved in this case falls under old Section 4 as well as new Section 4 of the Central Excise Act, 1944 we address them independently. 6.1 for the period April 1999 to 30th June 2000, provision of Section 4 of the Central Excise duty, 1944 apply during the relevant period it mandated determination of normal price. In the case in hand it is undisputed that the clearance made by the respondent during the period were contracted p .....

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ction value" means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward hand .....

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