TMI Blog2017 (4) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no denying of this fact that this extra amount has been recovered from the buyer and the same is in respect of the goods manufactured and supplied by the appellant - the amount recovered from the buyer by the appellant is in the nature of liquidated damages. Thus, the decisions of the Tribunal in the case of Inox Air Products Ltd.[2000 (12) TMI 184 - CEGAT, MUMBAI] is squarely applicable to the instant case - demand is set-aside. Appeal allowed - decided in favor of appellant. - Appeal No. E/1438-1439/2008 - Order No. A/10729-10730/2017 - Dated:- 31-3-2017 - Dr. D. M. Misra, Hon ble Member (Judicial) And Mr. Raju, Hon ble Member (Technical) For Appellant : Shri Hardik Modh, Advocate For Respondent : Shri L. Patra, Authorised Representative ORDER Per Mr. Raju This appeal has been filed by M/s Vimlachal Print Pack Pvt. Ltd. The demand was confirmed against the M/s V. P P. P. Ltd., and penalty was also imposed on the Director. Aggrieved by the said order of lower authorites, the appellants are before tribunal. 1.1. The appellants were engaged in the manufacture of Polycoated Printed Paper and Printed Polyster Laminated Rolls. The appellants we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and charts and similar items used in the production of such goods; (iii) value of material consumed, including packaging materials, in the production of such goods; (iv) value of engineering, development, art work, design work and plans and sketches undertaken elsewhere than in the factory of production and necessary for the production of such goods. [Explanation 2. - Where an assessee receives any advance payment from the buyer against delivery of any excisable goods, no notional interest on such advance shall be added to the value unless the Central Excise Officer has evidence to the effect that the advance received has influenced the fixation of the price of the goods by way of charging a lesser price from or by offering a special discount to the buyer who has made the advance deposit. Illustration 1. - X, an assessee, sells his goods to Y against full advance payment at ₹ 100 per piece. However, X also sells such goods to Z without any advance payment at the same price of ₹ 100 per piece. No notional interest on the advance received by X is includible in the transaction value. Illustration 2. - A, an assessee, manufactures and supplies certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able on the finished product under the excise law. He argued that in the said case when the mould were used to produce more than the declared capacity, the amortized cost of the cylinders calculated on the basis of declared capacity was added to entire production. He also referred to the decision in the case of CCE vs. Bhagwati Oxygen Ltd. 2009 (117) 647 (Tribunal), Jindal Praxair Oxygen Co, Ltd. Vs. CCE 2007 (208) ELT 181 (Tri.-Bang.), KSB Pumps Limited vs. CCE 2007 (216) ELT 51 (Tri.- Mumbai). In view of above, he argued that only the portion of cost of cylinder attributable to the actual production of goods, as against the maximum quantity that can be produced by the cylinder, needs to be included in the assessable value and on the balance, no demand can be raised. 2.1. The second issue on which the demand raised was regarding unused inputs, the cost of which was recovered from the buyers. The said demand was dropped by the first appellate authority, however, he directed the appellant to reverse the credit. He argued that the said goods were not cleared from the factory and the same were used in the manufacture of other goods in the factory. In these circumstances, no re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The show cause notice seeks to include the same as additional consideration to form part of the transaction value out of this total amount an amount of ₹ 12,68,422/- was received on account of production of such trail lots for M/s. HLL. 5. A perusal of the order-in-original shows that the assessee had contended as follows:- (i) ₹ 2,09,932-00: Debit Note No. VDC/165/99-00 dated 29.03.00. They had received purchase order from their customer M/s. Hindustan Lever Ltd. [H.L.Ltd. in short] for the manufacture and supply to them LB 150 Gms. Wrappers. For this purpose, they purchased cylinders in the new design for carrying out various trials. The cost incurred by them for the purchase of cylinders works out to ₹ 5,49,922-00. The trail lots were supplied to Khangaon, Bombay factory and Calcutta, for which actual reimbursement from various units came to ₹ 3, 39,291-00. Therefore, the difference of ₹ 2,09,931-00 was recovered from the customer H.L. Ltd. These being the charges incurred by them towards the purchase of cylinders which were recovered from the customer M/s H. L. Ltd. In view of this, they do not form part of assessable value attracting ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Inox Air Products Ltd vs. Commissioner of Central Excise, Nagpur Mumbai-I 2001 (134) ELT 224 (Tri.-Mumbai). Para 2 of the said order following has been observed:- 2. The agreement between the appellant and Raymond Steel Limited, the sole buyer of the gas manufactured at its Nasik plant provided that if the buyer fail to take delivery of the agreed quantity of gases from the appellant, it would be liable to pay compensation to the appellant of 60% of the basic price of the deficiency in the purchase of the nitrogen. The other agreement between the appellant and M/s. Lloyd Steels Limited which we are concerned in appeal E/2065/2000 is similarly worded. Each of the Commissioners holds that this amount referred to as short lifting compensation is in consideration of the supply of the goods and should form part of the assessable value. In Bhartia Cutler Hammer Ltd. v. CCE - 1998 (99) E.L.T. 436 the Tribunal considered the question as to whether liquidated damages for breach of the contract of purchase between the appellant before it and its buyer should form part of the assessable value. The Tribunal has not accepted the view of the Department that such damages shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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