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2019 (5) TMI 1016

subsequently, recovered from their customers would form part of the total price of the exempted goods? - Time Limitation - HELD THAT:- What can only be inferred from the show-cause notice is that the appellants have recovered 10%, of the amount representing value of exempted goods, from their customers. The appellants are showing value of the exempted goods and 10% of the value separately - We do not find that in the instance case it is established that the appellants are treating this 10% as duty and are arriving that cum-duty price of the exempted goods. Applicability of decision of Larger Bench in the case of M/S KRITI INDUSTRIES (I) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE INDORE [2017 (5) TMI 603 - CESTAT NEW DELHI (LB)] - HELD THAT: .....

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t. Commissioner (AR) For the Respondent ORDER PER: P. ANJANI KUMAR M/s. Bombay Engineering Industries, the appellants, are engaged in the manufacture of dutiable and exempted goods. The dispute relates to the payment of 10% of the value of exempted goods. The department contended that the appellants have cleared 54 No. of Gear boxes to M/s. Municipal Corporation of Mumbai availing exemption under No.6/2006-CE dated 1.3.2006; they have reversed 10% of the value of the goods and have recovered the same from their customers; this 10% amount was separately shown in the invoices; the appellants are required to pay 10% of the amount thus recovered. A show-cause notice dated14.11.2007 was issued and was confirmed by the original authority vide Ord .....

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l for the appellants submits that if for the reason that this 10% amount is shown separately in the invoice and recovered from the customers, the same needs to be included in the value, it leads to endless progression of the same premise. For example, if the value is 100 and 10% of the same that is ₹ 10 is shown separately in the invoice, as per the argument of the Department the value should be taken as ₹ 110/-. Assuming the department s contention to be correct, the invoice should show ₹ 110/- as value and 10% of the same i.e., ₹ 11/- should be shown separately and recovered from the customers. Then, the argument can continue that ₹ 11/- separately shown should be included to the value shown i.e., ₹ 110 .....

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of the price of the exempted goods is sought to be made by the learned Counsel as an assessable value of the dutiable goods and claimed reduction of 10% of the value of the goods to arrive at the assessable value for discharging 10%; this seems to be not in consonance with the law, as the assessable value is defined under the provisions of the Central Excise Act and the provisions of Section 4 categorically talks about the transaction value of the goods . Even applying broadly the proposal of the taxation, cost of the exempted goods needs to be considered as a whole and claim of reduction for 10% of credit towards consumption of the common inputs cannot be upheld as the price of exempted goods is not determined as per provisions of law. In .....

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e do not find that in the instance case it is established that the appellants are treating this 10% as duty and are arriving that cum-duty price of the exempted goods. As long as it is not proved that the amount recovered from the customers is not a cum-duty value that is arrived after deducting the said 10% from the total value, facts of the instance case are different from the one dealt by the Larger Bench. We do not find anything in the show-cause notice or the orders of the lower authorities that the issue being discussed in the instance case is about the arriving of cum-duty value or the applicability of provisions of Section 11D. Therefore, with due regards to the decision of the Larger Bench, we find that the ratio is not applicable .....

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