TaxTMI 
TaxTMI 
2009 (11) TMI 303
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....he dealers. According to the agreement, the appellant arranges for transportation/transit insurance on behalf of the dealer and undertakes to deliver the goods at the premises of the dealer. The agreement also clearly provides that the delivery shall be made "ex-factory". The transportation/delivery charges referred to as "Road Delivery Charges" (RDC) are recovered from the dealer by showing the same in sales invoices separately. On verification, it was found that in some cases, the difference between the RDC recovered and the actual RDC incurred would be positive and in some cases would be negative. The department has taken a, stand that wherever such RDC is positive, the same is to be treated as additional charges and duty is to be paid. 3. It was submitted that in respect of the transactions, the requirements of Section 4(1)(a) of Central Excise Act, 1944 have been fulfilled and therefore the RDC recovered separately after removal of the goods from the place of removal cannot be included in the assessable value. The appellants relied upon the decision of the Tribunal in case of M/s. Filaments India - 2003 (160) E.L.T. 314; M/s Majestic Auto - 2003 (160) E.L.T. 541 (T - De = 2....
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....of M/s Accurate Meters Ltd. - 2009 (91) RLT 653 (S.C.) wherein the decision in case of M/s Baroda Electric Meters was followed. We are afraid the decision of the Supreme Court in case of M/s. Accurate Meters Ltd. as well as M/s Baroda Electric Meters - 1996 (85) ELT. 363 would not help the appellant. In both these cases, while placing order, contractor's price pre-determined with break-up of different elements and accepted by Electricity Boards, have been shown. The contract clearly specified the prices ex-factory, for destination, freight and other charges. Therefore, in both cases, it was the choice made by the customer who agreed to pay certain specific amounts towards freight and transit insurance and contract for supply of meters and contract for delivery can be considered to be two separate limbs of the contract. Therefore, if the supplier made some profit, in the transporation, insurance etc., it was part of the contract of those activities and not relatable to the manufacture and supply of electric meters. Both these decisions are not applicable to the present case in view of the fact that in this case, the RDC is fixed by the supplier and as shown by one of the examp....
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....es, also imposed penalty. Appeal E/95/07 has been filed by the Revenue against dismissal of the department's appeal seeking imposition of penalties, by the Commissioner (Appeals). 5. On hearing both sides, we find that the issue in dispute stand settled in favour of the appellants by the Apex Court's decision in the case of Escorts JCB Ltd. v. CCE, Delhi - 2002(146) E.L.T. 31 (S.C.) holding that the element of freight and transit insurance is not includible in the assessable value. The Supreme Court further held that ownership of goods has no relevance insofar as transit insurance of goods is concerned. In this view of the mutter, the DR reliance upon Clause VII of the Conditions of Sale to the effect that owner ship of the goods is retained by the assessee does not come to the rescue of the Revenue as this has also been considered and held against the Revenue by the Apex Court. We also note that by the Order dated 17-2-03, the Commissioner of Central Excise, Pune, has accepted the contention of the assessee that their factory gate has to be treated as the place of removal... 6. Following the ratio of the aforesaid judgment of the Supreme Court, we set aside the impugned orde....
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....s must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed, asstatutes. To interpret words, phrases and provisions of a statute, it may be come necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton (1951 AC 737 at p. 761), Lord Mac Dermot observed: "The matter cannot, of course, be settled, merely by treating the ipsissima vertra of Willes, Jas though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight, to be given to the language actually used by that most distinguished judge." 12. In Home Office v. Dorset Yacht Co. [1970 All ER 294] Lord Reid said, "Lord Atkins speech not to be treated as if it was a statute definition. It will require qualification in new circumstances." Megarry, J in(1971) 1 WLR 1062 observed: "One must not, of course, construe even a reserved judgment of Russell L....
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.... that when the hearing started, our impression was that the issue has been settled in favour of the appellant by the precedent decision of the Tribunal and only when the learned special counsel vehemently submitted that he would be able to convince us that the decision of the Tribunal would not be applicable, we proceeded to hear both the sides and spent considerable time hearing the arguments. While deciding not to follow the decision of the Tribunal, we would like to record clearly that we are doing so with full awareness of our responsibility towards observance of judicial discipline. Each transaction is to be assessed and each show cause notice/issue has to be decided treating it as a fresh one unless proved otherwise. When a decision is given by the Tribunal based on representations made by both the sides, it would not be binding eternally, when it can be shown that no ratio was laid down or the conclusion was reached based on arguments advanced. 5.6 Learned special counsel also relied upon the decision of the Tribunal in case of Tripty Drinks (P') Ltd. - 2002 (147) E.L.T. 586 (Tribunal) wherein it was found that the assessee had diverted the cost of aerated water towards t....
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....partment that they would be claiming deduction of freight on equalized basis or would have paid duty on transportation charges wherever collection was extra. We can not also say that excess collection was a profit arising from delivery of vehicles alone. It is not the business of the assessee. Assessee's business admittedly is manufacture of motor vehicles and parts and delivery is part of that business. Therefore, on this ground also, this profit is includible even though subsequent discussions would show why short collection cannot be adjusted against excess. Once transportation is not a separate activity but a part of manufacture, assessee can claim deduction of only actual expenses incurred in road delivery and not excess. 5.7 Therefore, we hold that the decisions cited by the learned advocate for the appellant to support the contention that irrespective of the fact whether the amount collected under the head RDC is more than what is actually spent or not, RDC is not includible, are not applicable to the present case. Therefore, the obvious conclusion is that excess amount collected over the actual amount collected under the head of RDC is includible as an additional conside....
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....E.L.T. 489 (S.C.), the issue was valuation of the goods cleared to a sister wilt as a stock transfer for the purpose of levy of 8% excise duty as per Rule 57CC of Central Excise Rules, 1944. The Department had proposed assessment under Rule 6 of Valuation Rules and the lower authorities had already held that Rule 6(b)(ii) of Valuation Rules would apply. At this stage, the Hon'ble Supreme Court observed that it would not be open to the Commissioner to invoke Rule 7. In that case, the crux of the issue was the procedure/method to be adopted to determine the value of the impugned goods and Rule 6 arid Rule 7 of the Valuation Rules provides totally different methods. In Toyo Engineering India Ltd. case as reported in 2006(201) E.L.T. 513 (S.C.), the Apex Court did not allow the Department to deny the facility of project import on totally new ground which did not find mention in the show cause notice, neither the adjudicating authority nor the appellate authority had denied the facility of project import on that ground. In that case, the adjudicating authority, appellate authority and Tribunal had not considered the ground canvassed by Revenue before Supreme Court. In the case of Reckit....
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....The Hon'ble Court held that since the provisions of FERA, 1973 have been mentioned and all allegations and charges against the appellant were mentioned in clear terms in the show cause notice, the proceedings do not get vitiated. In this case also, it is not the argument of the appellant that facts have not been clearly mentioned and real ground has not been brought out. Mumbai Bench of the Tribunal had also considered a similar situation in the case of Endress & Hauser Flowtech (I) Pvt. Ltd. - 2009(237) E.L.T. 598 (Tri.-Mumbai). The Tribunal relied upon the decision of Hon'ble Supreme Court in the case of J.K. Steel Ltd. v. UOI - 1978 (2) E.L.T. J355 (S.C.). The Supreme Court in J.K. Steel case, had observed that "the exercise of a power cat, be traced to a legitimate source, the fact that the same was purported to have been exercised under a different power does not vitiate the exercise of the power in question. This is a well settled proposition of law." The Tribunal took note of the fact that in that case, impugned order was not being made valid on the basis of a ground which was not in existence on the date when the declaration was made. The conclusion that emerges by examinin....
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....l, subject to the other provisions of this Section, be deemed to be (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not related person and the price is the sole consideration for the sale Provided that- (i) where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall, subject to the existence of the other circumstances specified in clause (a) be deemed to be the normal price of such goods in relation to each such class of buyers; (ii) where such goods are sold by the assessee in the course of wholesale trade for delivery at the time and place of removal at a price fixed under any law for the time being in force or at a price, being the maximum, fixed under any such law, then, notwithstanding anything contained in Clause (iii) of this proviso, the price of the maximum price, as the case may be, so fixed, shall, in relation to the goods so s....
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....n 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 connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods." 7.3 In this case, once it is noticed that the assessee is collecting RDC over and above the value at the time of clearance itself by showing in the invoice what is required to be examined is whether this amount can be excluded from the value. For this purpose, definition of transaction value will have to be considered. According to the definition, a transaction value includes any amount that the buyer is liable to pay in audition to the amount charged as price. 7.4 When we look at the explanation in new ....
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....ction 4 as regards determination of value under the Valuation Rules. In the old Valuation Rules, the officer was to arrive at nearest equivalent of the normal price of such goods. In the new Section 4, there is no such requirement. Once it is held that transaction value under Section 4 cannot be determined, on the basis of value declared in the invoice, and in terms of explanation and transaction value, there are elements which are to be verified to determine the actual amount that can be deducted, resort to Valuation Rules becomes necessary. However, under the Valuation Rules, it is not necessary that the value determined should be equal to the transaction value or it should be nearest equivalent of transaction value. Therefore, once value under Section 4(1)(a) of Central Excise Act, 1944 is not available in respect of a transaction value has to be determined as prescribed and price at the factory gate even if available becomes irrelevant. Value has to be determined in the manner as prescribed in the rules. This becomes very clear when we consider the definition of normal transaction value given in the Valuation Rules, 2000 and addition of notional profit of 10% under Rule 8 of....
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....med only by the buyer. On the other hand, when it comes to recovery under any of the provisions of Central Excise law, the recovery is always from the assessee irrespective of the fact whether he has collected the excise duty or not even though excise duty being a indirect tax by its very nature, is to be collected from the customer and paid to the Government. Therefore, the legal provisions relating to the recovery of short levy/non-levy of excise duty would be based on whether the assessee is liable and that is the end. Whereas when it comes to refund, besides determining eligibility of assessee for the refund, the law requires the asses see to show that he has not collected excess amount of excise duty being claimed as refund. Since the value has to be determined on each transaction, assessment has to be on each transaction, where the amount collected under the head RDC is less than the actual amount, assessee has no option but to ask buyer to claim refund or refund the amount himself and claim it from the department. On the other hand, in case of excess collection irrespective of the fact whether he collects excess amount to be paid to the Government from the dealer or not, he ....