TMI Blog2023 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... r the increased price or the cost difference. If M/s.Mando India had agreed to pay the higher revised price it would definitely form part of the transaction value. As per the purchase orders or as per the communications between the parties there is no evidence to show that M/s.Mando India has agreed or is liable to pay the cost difference. The loan advance to the appellant by M/s.Mando India cannot be considered as an additional consideration or a consideration that has influenced the price agreed between the parties. The loan has been completely repaid by the appellant by adjusting in the invoices while making clearances of the products to M/s.Mando India. Further the debit notes have been raised subsequent to sale. Therefore, the higher revision of price not agreed by the buyer cannot form part of transaction value. The debit notes do not form part of transaction value. The excise duty paid is therefore excess. In the case of PETROFAB VERSUS COMMISSIONER OF C. EX. CUS., VADODARA [ 2007 (11) TMI 118 - CESTAT AHMEDABAD ] a similar issue came up for consideration - The Tribunal held in favour of the assesee holding that the supplementary invoices have been issued after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the gross amount Rs.4.30 crores (cost difference claimed from their customer viz. M/s.Mando India). The appellant thus claimed refund of the excise duty of Rs.31,47,563/- contending that it is excess duty paid by them. This cost difference claimed by appellant was not admitted by M/s.Mando India. 3. However, M/s.Mando India had agreed to support the appellant with a loan and the money of Rs.4.30 crores was paid by Mando India as a loan. The appellant repaid the loan by making adjustments in the clearances made to M/s.Mando India. Subsequent to the clearances and repayment of loan by adjustments the appellant raised debit notes No.001 and 002/09-10 dated 30.06.2009 for Rs.4.30 crores inclusive of excise duty of Rs.31,47,563/-. This duty was paid by the appellant through debit in their cenvat credit account in the month of June 2009. M/s.Mando India did not agree for the price revision and did not honour debit notes of Rs.4.30 crores. According to appellant, they thus happened to pay the excess excise duty of Rs.31,47,563/-. The refund was sanctioned in full vide OIO No.173/2010 dt. 03.12.2010. The Department filed Appeal No.1/2011 (M-IV) (D) dt. 19.01.2011 against the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the remaining amount of Rs. 2.30 Crores was given vide cheque dated 30.03.2009. 5.5 The said loan was repaid and adjusted by the Appellant through subsequent clearances. The same is an admitted fact in the Impugned Orders itself ( Paragraph 3 of the Order in Appeal No. 18/2013 dated 18.11.2013 ). 5.6 In good faith and in anticipation that the increase will be approved by Mando India, the Appellant raised debit notes No. 001 002/09-10 dated 30.06.2009 for Rs.4.30 crores inclusive of excise duty of Rs.31,47,563/-. The duty was paid through in cenvat account during the month of June 2009. The debit notes were raised suo-moto and were never accepted by Mando India and accordingly Mando India did not take CENVAT Credit of Excise Duty paid, nor the Input Tax Credit of the VAT paid. As the increase in price was not accepted by Mando India, the Appellant filed refund claim for the excise duty of Rs. 31,47,563 paid on the debit notes on 24.06.2010. 6. Ld. Counsel submitted that it is the case of the Department that the price of the goods as per the transaction value under Section 4(1)(d) of the Central Excise Act, 1944 also includes the amounts raised through the Debit Notes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further, there is no commercial consideration received at the time of fixing the price of PA Assembly in the Purchase Order. . Hence, the decision of Fiat Case does not apply to the facts here. Reliance in this regard is placed on CBEC's Circular No. 979/03/2014-CX dated 15.01.2014. D. The burden to prove that the loan sanctioned/debit notes raised has resulted in increase in the transaction value of the goods manufactured and supplied by the Appellant is on the Department which has not been discharged and the demand of refund is based on mere conjectures and presumptions. Reliance in this regard, is placed on the case of Commissioner of Customs, Kolkata v. Initiating Explosives Systems (I) Ltd., 2008 (224) E.L.T. 343 (S.C.) which holds that Burden to prove under-valuation lies on Revenue. Ld. Counsel prayed that the appeals may be allowed. 8. Ld. A.R Ms. Anandalakshmi Ganeshram supported the findings in the impugned order. 8.1 Ld. A.R submitted that the appellants have themselves admitted that under wishful thinking that M/s.Mando India would reimburse the higher cost, the debit notes have been raised by them and the duty discharged. It is proved from the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finished goods and the debit notes have been raised subsequently to include the cost of imported inputs. 8.4 The contention of appellant is that the manufacture and clearance of PA assembly by the appellant using the imported inputs has resulted in an increase of the manufacturing cost (cost difference) of an amount of Rs.4.30 crores. Excise is a duty on manufacture. The appellant is liable to pay the increased manufacturing cost so, the duty paid is correct. 8.5 It is not accepted that value of the debit notes has not been honoured by the buyer. It is a fact that as per Section 4 (1) (d), transaction value includes any amount charged through invoice/debit note in the course of sale of goods constituting transaction value. The appellants themselves have submitted in grounds of appeal that the debit notes were raised so that the buyer would reimburse the higher cost due to the use of imported ball joints in the PA assembly manufactured. This proves that the costing made by the appellant when the goods left the factory of the appellant was not inclusive of the cost of imported ball joints and thus duty discharged was less. Subsequently, they have raised the debit notes and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid in 6 months. The appellant received the said loan amount in two cheques; one is dated 1.12.2008 for an amount of Rs.2 crores and the other dt. 3.3.2009 for Rs.2.30 crores. The said loan was repaid and adjusted by the appellant on their subsequent clearances made to M/s.Mando India. There was a clause for payment of interest, if the repayment was delayed beyond a period of 6 months. The appellant did not have an occasion to pay interest as the loan amount was paid and adjusted towards the clearances made to M/s.Mando India within a period of 6 months. 12. The above fact that loan was advanced to appellant by M/s.Mando India and the appellant has repaid the same by making adjustment in the clearances made to M/s.Mando India has been verified by the adjudicating authority. In para-3 of the order dt. 03.12.2010 passed by the adjudicating authority it is seen that the Range officer vide letter OC No.656/2010 dt. 14.09.2010 had filed a verification report which stated that major input for PA assembly viz. Inner Ball Joint and Outer Ball Joint was imported by the appellant and that M/s.Mando India had offered an advance of Rs.4.30 crores. It is also reported that the loan ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, the appellant has raised debit notes on M/s.Mando India for a total amount of Rs.4.30 crores including the excise duty. The said debit notes has not been honoured by M/s.Mando India. The appellant thus contends that they have paid excess Excise duty to the tune of Rs.31,47,563/-. 15. From the facts the question that arises for consideration is whether the amount of Rs.4.30 crores raised by debit notes by the appellant as the cost difference would form part of the transaction value or not. For better appreciation, the definition of transaction value as in Section 4 (1) (d) is reproduced as under : SECTION 4. Valuation of excisable goods for purposes of charging of duty of excise. (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall, subject to the other provisions of this section, be deemed to be . (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplementary invoices for additional amount on the ground that they had used more material and had undertaken more work than that was expected at the time of contract. The said supplementary invoices were not honoured by the buyer. The department was of the view that the appellant had to pay duty on the amount shown in the supplementary invoices also and have to be made part of the transaction value. The Tribunal held in favour of the assesee holding that the supplementary invoices have been issued after the goods have been sold and cannot form part of transaction value. The relevant part reads as under : 5 . We have carefully considered the submissions. We agree with the submissions of the learned Advocate. No evidence have been produced to show that these items supplied by the appellant as spares were manufactured by the appellant and, therefore, the reversal of credit taken at the original price on which these items were procured is as per law. 6. Coming to the other issue in the appeal, the appellant supplied manway plugs at a particular price as per contract. Subsequent to the clearance of the goods they raised supplementary invoices for additional amount on the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t relies upon the judgment of the Supreme Court in MRF Ltd. v. C.C.E., 1997 (92) E.L.T. 309 in support of the proposition that an alternate in the price of excisable goods subsequent to clearance of the goods would not affect the liablility to Central Excise duty already accrued. The Court orders to the view of the Tribunal in Indo Hacks Ltd. v. C.C.E., 1986 (25) E.L.T. 69 that duty chargeable is at the rate, and at price in force when the goods are cleared from the factory gate and not on the price reduced later. The court therefore held that reduction in the price of tyres by the Government of India would not entitle the appellant before it to claim refund of the excise duty paid paid on the price cleared. 5 . The same principles would hold true in cases where subsequent to the clearance price is increased as in the present case. The price for assessment would therefore be the price at which the goods were cleared, and not the price now determined. In this view of the matter, we do not think it necessary to consider the arguments on limitation, raised by the appellant. 19. The Tribunal decision in the case of Harsiddh Detergents Ltd. Vs CCE Ahmedabad - 1998 (98) ELT 194 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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