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M/s. Dynamic Techno Medicals (P) Ltd. Versus CC&CE, Cochin And Vice-Versa

Valuation - captive consumption - The assessee were drawing samples for testing quality of the product and were retaining such samples within the factory as control samples - The original authority had confirmed the demand for the reason that drawing of samples should be considered as captive consumption - Held that: - the samples are retained within the factory and hence not liable to duty inasmuch as the same have not been cleared from the factory - demand set aside. - Quantity discounts - .....

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ant as the same was claimed at the time of sale of the goods. - Quantum of discount extended - the assessee s claim is that the excise duty paid per unit of bandage is already more than that payable after quantity discount - Held that: - the issue has been remanded to the original authority for re-quantification of demand in the light of Rule 5 of Central Excise Valuation Rules 2000. - Appeal allowed by way of remand. - E/664/2006, E/817/2006, E/686/2006, E/690/2006 - Dated:- 31-1-2017 - .....

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.245/2006-CE dt. 31/03/2006 and are filed by assessee and Department respectively. 2. The assessee is a manufacturer of Cotton Crepe Bandages (CCB, for short) falling under Central Excise Tariff No.30 04 90. As per the practice, the assessee clears the goods i.e. CCB on stock transfer basis to the central warehousing depot situated in different places. From there, the goods are sold to dealers. The dispute covers the following issues:- i. The assessee was drawing samples for the testing purpose. .....

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ment of duty. The assessee s claim is that the goods cleared as free offer are in fact cleared by granting quantity discounts at the time of selling from the central warehousing depot to the dealers. Such quantity discounts were disallowed by the original authority but allowed at the level of the first appellate authority. iii. A portion of goods cleared as free offer to the depots in subsequent sales, these were found to have been sold to certain institutions at reduced prices and without quant .....

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nal. In respect of the demand of excise duty on sales at reduced prices upheld by the Commissioner(Appeals), in respect of institutional sales, the assessee is in appeal before us. 3. With the above background, we heard Shri Sandeep Gopalakrishnan, learned counsel for the assessee as well as Shri Jagdish, learned AR for the Revenue. 4. The assessee were drawing samples for testing quality of the product and were retaining such samples within the factory as control samples. The original authority .....

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34 ] ii. Surya Food & Agro Ltd. Vs. CCE, Noida [ 2003 (156) ELT 488 ] Consequently, we find no infirmity in the decisions of the Commissioner(Appeals) on this issue, which are upheld. 5. Next, we consider the issue of quantity discounts. The goods have been cleared from the factory on payment of excise duty on stock transfer basis to their depots. At the time of such clearances, the appellant cleared additional quantities and termed these as free offer . Nevertheless, the claim of the appell .....

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s 1944. In such price declarations, the fact of free offer/quantity discounts have been clearly mentioned. The sample copies of such declarations were filed before the Commissioner(Appeals) and also with the present appeal. Further, the appellant has submitted that the offer of free offer has been advertised to make it known to all the dealers/distributors. Sample copies of such offer was also submitted before the Commissioner(Appeals) as well as with this appeal. We have perused these documents .....

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s of the Hon ble Supreme Court s decision in the case of Purolator India Ltd. Vs. Commissioner [2015(323) ELT 227 (SC)]. The Tribunal concluded relying on the decision of the Apex Court, as follows:- From the above definition it can be seen that the actual amount that the buyer is liable to pay at the time of sale or at any other time shall be the transaction value. In the present case admittedly the sale has not taken place from the factory gate but goods were sold from the depot and at the tim .....

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[2015 (323) E.L.T. 227 (S.C.)] has observed as under : 18. It can be seen that Section 4 as amended introduces the concept of transaction value so that on each removal of excisable goods, the transaction value of such goods becomes determinable. Whereas previously, the value of such excisable goods was the price at which such goods were ordinarily sold in the course of wholesale trade, post amendment each transaction is looked at by itself. However, transaction value as defined in sub-clause (3) .....

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ods forms the basis of value, whether such price has been paid, has been paid in part, or has not been paid at all. The basis of transaction value is therefore the agreed contractual price. Further, the expression when sold is not meant to indicate the time at which such goods are sold, but is meant to indicate that goods are the subject matter of an agreement of sale. Once this becomes clear, what the learned counsel for the assessee has argued must necessarily be accepted inasmuch as cash disc .....

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