TMI Blog2003 (1) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... lly paid excluded certain elements like discounts which were not eligible for exclusion. Under the adjudication order dated 21-11-2001 impugned in this appeal, the Commissioner upheld the allegation regarding under-valuation raised in the show cause notice and demanded a short paid duty of over Rs. 84 lakhs. An amount equal to the duty found to be evaded was imposed as penalty also. The duty remand has been made by invoking the proviso to Section 11A(1) of the Central Excise Act on the ground that the short payment is the result of suppression of facts by the appellants. It is to be noted that the proviso allowed re-opening of assessment and recovery of short levied duties for an extended period covering 5 years from the date of show cause notice, in cases involving fraud, suppression of facts, etc. The penalty equivalent to the duty has been imposed by taking resort to Section 11AC which provided for penalty equivalent to the duty evaded in cases involving proviso to Section 11A. The impugned order has made a further demand of interest at appropriate rates on the amount of duty held to be evaded under Section 11AB. The present appeal challenges the order both on merits and on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulates assessment of the goods at the normal price at the time of removal. Normal price at the time of removal is the basis for assessment of all goods removed by an assessee. If the price was for a time later than the time of removal, due adjustment in the price is required to be made to make it the price at the time of removal and assessable value fixed at that value. Therefore, the original assessments made at the cash discounted prices constituted the legally correct assessable values. This is the law laid-down in the judgments relied upon by the appellants. A contrary view taken in the impugned order has no legal basis. (2) Additional Consideration by way of Interest Payment : The demand under this head is on the ground that the appellants had paid an interest of about Rs. 31 lakhs to M/s. Vam Organic Chemicals Ltd., and this amount is to be treated as additional consideration and should form part of the assessable value of the goods. The appellants contend that this finding has no legal basis. It has been pointed out that the payment in question was payment of interest for delay in the payment for raw materials procured from M/s. Vam Organic Chemicals Ltd. The appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained the stipulation that overdue payments shall attract interest at 22%. As against this, the appellants' contention is that purchase of raw material from M/s. Vam Organic and sale of adhesive to them are entirely different transactions, and on purely commercial terms. With regard to non-payment of interest on delayed payments, the appellants' defence before the Commissioner and in the present appeal is that even though the invoices of M/s. Vam Organic Chemicals Ltd. stipulated liability to interest in case of over due payments, as a matter of fact, interest was not being levied from customers. They have also produced material to show that the non-charging of interest from them was not a favour extended to them but there were several customers of M/s. Vam Organic Chemicals who were making late payments but no interest was charged from them. They have also pointed out that the sale price for the adhesive to M/s. Vam Organic Chemicals Ltd. was a negotiated price and the same was in no way lowered or reduced in consideration of non-charging of interest on the payments for raw material. Flowing from this contention is the appellants' submission that unless the sale price of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the impugned order is contrary to the decision of the Apex Court in the case of Philips India Ltd. v. CCE - 1997 (91) E.L.T. 540 (S.C.). As against this the revenue's contention is that keeping of coins is a sales promotion measure by the buyer of the goods and cost of sales promotion should form part of the assessable value. During the hearing of the case, learned SDR referred the decision of the Apex Court in the case of M/s. Glaxo (I) Limited v. CCE, Kanpur - 1995 (76) E.L.T. 451 wherein it was held that the cost of gift article added to the goods under manufacture is not entitle to deduction while fixing the assessable value of the goods. The learned SDR also pointed out that it is settled law that cost incurred up to the departure of the goods from the factory are required to form part of the assessable value. He relied on the decision of the Supreme Court in the case of M/s. Sidhartha Tubes Limited v. CCE - 2000 (115) E.L.T. 32 in support of this contention. On this issue, learned Counsel for the appellant also pointed out in rejoinder that the revenues contention is contrary to the specific provision in Rule 5 of Valuation Rules that only additional consideration flowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of assessable value. As against this, the learned SDR has contended that it is settled law that all sales promotion costs incurred by the manufacturer do form part of the cost of production and therefore, they are to form part of the assessable value of the goods. It is the contention of the learned SDR that the coin was an additional item and therefore, did not merit any deduction. He also pointed out that the coin is not in the nature of discount to the wholesale buyer inasmuch as the wholesale dealers could not avail themselves of the discount since coin remained packed with the retail packet until the consumption of the goods by the retail buyer. (ii) This is literally a cash discount inasmuch as hard cash is returned along with the goods. The buyer of the goods gets back part of the price through the cash coins packed along with the adhesive. Cash discount can be allowed in many ways. Normally, it is given as a discount in the invoice and the price is suitably reduced to the extent of cash discount. The difference in the present case is that the full value of the goods is charged in the invoice and goods are returned along with the cash packed in adhesive container. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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