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TMI Blog2017 (3) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... ity by taking into account the retail sale price charged by Luxor. For this, the appellants worked out the assessable value by taking into account the retail sale price of the pens and by doing the backward calculations after claiming deductions on account of discounts, taxes, duties etc. in the absence of MRP based assessment of goods. The appellants were claiming benefit of exemption from duty under Notification Nos. 4/97-CE dated 01.02.1997, 5/98-CE dated 02.06.1998, 5/99-CE dated 28.02.1999, 06/2002-CE dated 01.03.2002 and the successor notifications and in terms of which pens of the value less than Rs. 100/ Rs. 200 were exempted from duty. Also, the appellants filed period declarations with the department. Since the appellants and Luxor were related persons, the appellants adopted the maximum retail price of the pens, as fixed by Luxor, for discharging the duty since beginning, from which the appellant have worked out the assessable value as shown below:- Price to consumer Less : Retail margin (Discount) (Rs.) Less : Distributor margin (Discount) (Rs.) Price to distributor Less : Sales tax (Rs) Average Sales Tax (%) Invoice rate PPD 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 4(1). "(d) "transaction 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 expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax 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. 6/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of 1985 by saying that the provisions of Section 4 has undergone changes after 01.10.1975. 5. Shri Lakshmikumaran also assailed the impugned order on the ground of limitation. He submitted that the appellants have been regularly filing 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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty is paid at the applicable rates. 8. Revenue has contended that the element of excise duty is not a permissible deduction since in cases where the exemption from duty is claimed, no duty becomes payable. Such a stand 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the Notification is to render the chargeability or otherwise to duty of excise of footwear falling under Item 36 of the First Schedule is made wholly dependent upon the `value' of the article of footwear; in case such `value' exceeds Rs. 5 per pair, duty will be chargeable at the rate of 10% whereas if the value does not exceed Rs. 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 Rs. 5 per pair. It is, therefore, plain that before deter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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