TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Supreme Court orders refund & interest to M/s HPL Socomac Private Limited in price variation dispute</h1> <h3>M/s HPL Socomac Ltd. Versus Commissioner of Central Excise, Gurgaon</h3> The Supreme Court overturned the CESTAT decision and ordered a refund of Rs. 21,24,920, plus 9% interest, to M/s HPL Socomac Private Limited. The novated ... Denial of refund claim u/s 11B - Valuation - revision in price at lower rate - reduction of penalty of upto 5% on account of delay in delivery - The Commissioner (Appeals) by his order dated 18.6.2004 held that as per Section 4 of the Central Excise Act, where the duty of excise is chargeable on any excisable goods with reference to their value, then on the date of removal of such goods from the factory premises such value will be the transaction value. Held that:- The price had been fixed before removal from the factory premises in May, 2002. The Commissioner (Appeals) order dated 18.6.2004 though correct in principle is wrong on facts as he does not refer to the letter dated 15.4.2005 of the appellant at all. The CESTAT is wrong in turn because on facts there was no imposition of penalty for the delayed period. - impugned order of CESTAT and the Commissioner (Appeals) are set aside. - Decided in favour of assessee. Issues:Refund claim rejection under Section 11-B of the Central Excise Act based on price novation post goods removal from factory premises.Analysis:The case involved M/s HPL Socomac Private Limited, engaged in manufacturing electronic meters under Chapter heading 9028.00 of the Central Excise Tariff Act. A purchase order was received from M/s. DHBVNL for 65,000 electronic meters at a specified rate, with a condition to supply by a certain date. The appellant supplied 30,000 meters by the due date and the remaining 35,000 meters later. A novation of price occurred post-supply acceptance, reducing the price to Rs. 600 per meter. The Commissioner (Appeals) held that the reduced price post-supply cannot be considered as the transaction value at the time of removal, upholding the refund claim rejection.The CESTAT affirmed the Commissioner's decision, stating that the penalty imposed for delay was separate from the goods' price, and no provision allowed deduction of penalty from the assessable value. The appellant contended that no penalty was involved in this case, and the novated price was agreed upon before goods removal. The revenue argued that any post-supply price variation cannot be the transaction value under the Central Excise Act.The Supreme Court found that the novated price of Rs. 600 per meter was agreed upon before goods removal, making it the transaction value. The Commissioner's order was deemed correct in principle but erroneous in fact for not considering the novation letter. The CESTAT's decision was overturned as no penalty was imposed for delay. The Court ordered the refund of Rs. 21,24,920, the difference between the original price and the reduced rate, along with 9% interest from November 2002. Payment was directed within three months from the date of communication to the Commissioner of Central Excise Range-III, Gurgaon, allowing the appeal in favor of the appellant.
TaxTMI 
TaxTMI 
