TMI Blog2017 (3) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... on of sales tax and other taxes, if any actually paid. Further, the explanation specifies that the price-cum duty so arrived at shall be deemed to include the duty payable on such goods - When we look at the calculation attached by the appellant in arriving at assessable value, we find that the retail price is the price charged by Luxor. From such retail price, initially the retailer and distributor margins are deducted to arrive at the price to distributor. Subsequently, the sales tax actually paid is deducted followed by the allowable deduction for discounts as well as the amount attributable to freight involved in transportation of the goods, from which the excise duty element is deducted to arrive at the assessable value - the explanation allowed deduction in respect of only trade discount and the amount of duty payable. Even though, the concept of value with effect from 01.7.2000 and the concept of price-cum duty with effect from 14.05.2003 are not identical to the pre 1975 provisions, the two are similar in respect of deduction which shall be allowed to arrive at value. Time limitation - Held that: - It is clear that appellant has claimed deduction for excise duty to arriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount) (Rs.) Less : Distributor margin (Discount) (Rs.) Price to distributor Less : Sales tax (Rs) Average Sales Tax (%) Invoice rate PPD 2% Net of discount Freight 1% Value with Excise Less : Excise Excise % Assessable Value Pursuant to the audit of the appellant s excise records during the period from 13.02.2007 to 19.02.2007, an objection dated 23.04.2007 was raised that the appellants, by making deduction towards cum-duty price, were collecting duty from their customers but not depositing the same with the government, which is recoverable from them under Section 11D. The officers of Central Excise visited the factory premises of Luxor on 17.08.2007 and appellant s factory premises on 19.09.2007. Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other taxes, if any actually paid or actually payable on such goods. Explanation. For the removal of doubts, it is hereby declared that the price-cum-duty of the excisable goods sold by the assessee shall be the price actually paid to him for the goods sold and the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and such price-cum-duty, excluding sales tax and other taxes, if any, actually paid, shall be deemed to include the duty payable on such goods. The extract of Notification No. 6/2002-CE dated 01.03.2002, is reproduced below for ready reference:- S/No Chapter or heading No. or sub-heading Description of goods Rate under the First Schedule Rate under the Second Schedule Condition (1) (2) (3) (4) (5) (6) 229 96.08 Pens and parts thereof, of value not exceeding ₹ 100 per piece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price declarations from time to time along with calculation charts detailing how the assessable value of the pens have been arrived at. In such price declarations, it has been clearly indicated that the benefit of exemption has been claimed for pens having value less than ₹ 100, after deducting the excise duty. Further, since the unit has been subjected to audit periodically, the price declarations have been extensively scrutinized with the related documents, the department could not allege any suppression on the part of assessee and could not invoke extended period of limitation for demanding duty. He also submitted that ld. Commissioner has wrongly invoked the provisions of Section 11D of the Central Excise Act to confirm the demand of duty. He pointed out that the provisions of Section 11D were never proposed in the show cause notice dated 31.01.2008 and hence, invocation of the same in the impugned order is legally unsustainable and to this extent, the impugned order has gone beyond the scope of show cause notice. 6. Ld. DR supported the impugned order. He referred to the definition of the term transaction value in Section 4(3)(d) and argued that excise duty will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and by the Revenue does not appear to be in line of the concept of transaction value enshrined in section 4 with effect from 01.07.2000 as amplified by the explanation inserted with effect from 14.5.2003. As can be seen from the definition of transaction value as well as explanation reproduced earlier, while the transaction value exclude of taxes, if any actually paid or payable, the explanation inserted has created the concept of price cum-duty. This is a deemed concept in which deduction is allowed only to the extent of sales tax and other taxes actually paid. It follows that, to arrive at the transaction value from price cum duty, the excise duty element is deductable. In fact, the calculation of the appellant proceeds exactly as per the concept of transaction value and price-cum-duty, as above. Ld. Commissioner in the impugned order has disallowed deduction of excise duty to arrive at the assessable value by following the decision of the Hon'ble Supreme Court in Bata India-1996 case as well as Amrit Agro case -2007. We have gone through the above decisions. It is evident that these decisions have been rendered by the Apex Court by considering the provisions of Section 4 pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case such `value exceeds ₹ 5 per pair, duty will be chargeable at the rate of 10% whereas if the value does not exceed ₹ 5 per pair, no duty will be chargeable on such items of footwear, that is the rate of duty will be `nil . It is precisely to such a situation that the provision of Section 4 gets attracted because as expressly stated in the opening part of the said section the mode of determination of `value specified in the section will be applicable to all cases where any article is chargeable with duty at a rate dependent upon the value of the article. In the case of a total exemption, the rate will be `nil . Thus, Entry 36 read along with the Notification dated July 24, 1967 clearly shows that the chargeability to duty in respect of any article of footwear is made dependent upon its value in the sense that the chargeability to duty of excise will arise only if the `value of the article does not exceed ₹ 5 per pair. It is, therefore, plain that before determining the question of availability of the exemption under the Notification dated July 24, 1967, the first essential step is to determine the `value of the article in the manner prescribed in Sectio ..... 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