2000 (7) TMI 317 - AT - Central Excise

Tribunal excludes notional interest from assessable value unless proven by department. Burden of proof emphasized.

The Tribunal dismissed the appeals, holding that notional interest on advances should not be included in the assessable value of goods unless the ... Valuation Issues:- Whether notional interest on advances received by assessees should form part of the assessable value.- Whether the burden of proof lies on the department to show that advances resulted in a depression of the price.- The impact of the Supreme Court judgment on the burden of proof regarding the inclusion of notional interest in the value of goods.- The validity of the department's appeal in light of the circular issued by the Board.Analysis:1. The primary issue in the appeals was whether the notional interest on advances received by assessees should be included in the assessable value of goods. The Assistant Commissioner proposed such an addition, which was confirmed, but the Commissioner (Appeals) overturned this decision, stating that the department failed to demonstrate that the advances led to a depression of the price, hence notional interest need not be included.2. The ground of contention was whether it is the department's responsibility to prove that advances resulted in a price depression. Citing the Tribunal's decision in a previous case, the appellants argued that the full consideration for the sale of goods should be the price, without any additional burden of proof on the assessees.3. Referring to the Supreme Court judgment in VST Industries v. CCE, it was emphasized that notional interest should only be included if it is proven that the advances depressed the price of goods. The circular issued by the Board reiterated this stance, placing the onus on the department to establish the existence of any additional consideration beyond the sale price.4. The Tribunal highlighted that no evidence of any additional consideration for the sale of goods existed, as the advances were considered part of the price. The burden of proof was on the department, and their appeal lacked substantiation of any additional consideration, aligning with the Supreme Court's position.5. The Tribunal dismissed the appeals, emphasizing that the burden of proof lay with the department, and the circular from the Board further supported this stance. The Tribunal criticized the filing of contradictory appeals, which disregarded the Board's instructions, indicating a lack of adherence to legal directives and the need for accountability within the department.