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of <h1>Appellate Tribunal: Penal interest not part of assessable value for manufacturers.</h1> <h3>ANDHRA PRADESH PAPER MILLS LTD. Versus COMMR. OF C. EX., VISAKHAPATNAM</h3> The Appellate Tribunal ruled in favor of the appellants, manufacturers of papers, stating that penal interest collected should not be included in the ... Valuation Issues: Inclusion of penal interest collected in the assessable value of goods.Summary:The appellants, who are manufacturers of papers, offered cash discounts for prompt payment of the price but collected penal interest through debit notes when buyers defaulted on payment. The issue revolved around whether the penal interest collected should be included in the assessable value of the goods. The Revenue proposed inclusion, which was confirmed by the Original Authority and upheld by the Commissioner (A) citing a case-law distinction. However, upon careful consideration, the Appellate Tribunal found that the penal interest collected was not part of the assessable value as it was equivalent to the cash discount allowed. Referring to a previous decision in the appellant's own case, the Tribunal ruled in favor of the appellants, stating that penal interest is not includable in the assessable value. Consequently, the appeals were allowed with consequential relief.
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