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2019 (5) TMI 1016

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..... 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:- Larger Bench has concluded that payment of an amount at the rate of 8% or 10% under Rule 6(3)(b) of CENVAT Credit Rules, 2004 is not a duty, not a tax and hence, cannot be deducted from the price of the exempted goods cleared by consuming cenvated inputs. It follows from this decision that the said 8% or 10%, as the case may be, cannot be deducted from the price of exempted goods - As long as it is not proved that the amoun .....

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..... 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 Order-in-Original No.30/2008 dated27.8.2008 which was upheld by the Commissioner (A) vide Order-in-Appeal No.66/2009 dated 8.7.2009 which is under appeal. 2. Learned counsel for the appellants has submitted that the order incorrectly interprets that amount reversed under Rule 6(3)(b) of CENVAT Credit Rules, 2004 and subsequently, recovered from their customers would form part of the total price of the exempted goods; he .....

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..... 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/- making the correct value to be ₹ 121/-. 2.3 Learned counsel also submits that the period of dispute is May 2005 to March 2006 and show-cause notice was issued on 24.11.2007, which is beyond normal period. Department being aware of the practice of the appellants, extended period is not invokable and therefore, the entire duty is barred by limitation. 3. Learned AR for the Department reiterates the findings of .....

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..... ut 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 our view the reversal of 10% of the price of the exempted goods is not for maintaining separate account of inputs used in the manufacture of exempted and is an option extended and exercised, cannot be held as compulsory exaction of money for the purpose of public. 4.3 In sum, we hold that the payment of an amount at the rate of 8% or 10% under Rule 6(3)(b) of the Cenvat Credit Rules, 2004 is not a duty, not a tax and .....

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..... t 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 to the present case so as to decide whether recovery of such 10% of the value from the customers renders the value shown in the invoices to be a cum-duty price. 4.1 Moreover, the learned Counsel for the appellants submitted that they have been regularly filing ER-1 returns and as such, the facts of the case are before the Department from time-to-time. It is not understood as to why the Department did not initiate any .....

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