2009 (4) TMI 823

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....hey supply their products mainly to M/s. Visakhapatnam Steel Plant (VSP in short) and M/s. Bhilai Steel Plant (BSP in short). It is seen that M/s. VSP had agree to pay an amount as 'Performance Guarantee Bonus' in case the Refractories withstand over and above certain specified heats. Revenue proceeded against the appellant on the ground that the amount received as performance guarantee bonus by the appellant is includible in the assessable value. Consequently, Show Cause Notices were issued for payment of duty. Penalties were also proposed. The Original Authority held that the performance guarantee bonus is includible in the assessable value. He also justified the invocation of the extended period. Consequently, an amount of Rs. 66,18,549/....

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....at extended period is not invocable when Show Cause Notice is issued for the same subject prior to present notices. The following case-laws were relied on : (a)     Nizam Sugar Factory v. CCE, A.P. - 2006 (197) E.L.T. 465 (S.C.) (b)     Hyderabad Polymers (P) Ltd. v. CCE, Hyderabad - 2004 (166) E.L.T. 151 (S.C.). The amendment brought into Section 4 with effect from 1-7-2000 would not have any effect on the issue. 4.2 The issue is no longer res integra and is settled in the following decisions of the Tribunal. (a)     Indian Telephone Industries v. CCE, Cochin - 2004 (175) E.L.T. 384 (Tri.-Bang.) (b)     Jalan Refractories (P) Ltd. v. CCE, Jaip....

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....Excise duty is to be levied on the normal price at which goods are ordinarily sold at the time of removal. In the instant case, the goods were sold at the time of removal at an agreed price. Subsequent dealing between the parties on account of performance or otherwise of the goods, is not of any concern in regard to the sale price of the goods at the time of removal. Therefore, there was no justification for treating the bonus amount as part of the price of the goods and for demanding duty on that basis. The action is also patently unjust as it has been done without giving abatement for the penalties. Accordingly, the duty demand is set aside." 6.2 Further, in the MPR Refractories Ltd., decision of the Chennai Bench (supra), it has been ....