2008 (8) TMI 672

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....ppellant. Shri R. Ravindran, Advocate, for the Respondent. [Order per : K.K. Agarwal, Member (T)]. -  This is an appeal filed by the revenue. The facts of the case are that the respondents were issued a show cause notice seeking to demand duty on notional interest accrued on advances taken by them from their customers, in respect of goods tailor made to the requirements of the custom....

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....ssable value. It has further been stated that after 1-7-2000, the nexus is not required to be proved under new Section 4, since money value of additional consideration i.e. notional interest and other advances received by the assessee has to be clearly included in the assessable value. 3. Ld. advocate for the respondents, on the other hand, contended that there is no nexus between the adva....

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....g a lower price which would otherwise have been payable, had these advances not been taken. But since the interest element is returned to the customer by suitable reduction in the price, the price cannot be said to be influenced by any other consideration as consideration of interest is duly returned by them in the form of a cut in the price and is not retained by them. Once it is a negotiated pri....

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.... duty has been correctly demanded on the element of notional interest accrued which resulted in lowering of the price. The respondents plea that the interest is paid back in the form of cut in price and not retained by it is of no consequence as this element of interest should have been returned by them from the total realizable amount from the customer by paying duty on the correct price. The adj....