TaxTMI 
TaxTMI 
2010 (10) TMI 312
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....ursuant to the visit of the Excise Officer to the factory premises of the appellants on 12-7-2002, it was noticed that the appellants were not including the cost of drums supplied by the buyers of malto dextrine syrup in the assessable value while determining the duty liability. In the course of the investigation, a statement of Shri Varinder Walia, authorized signatory of the appellants came to be recorded on 12-5-2003 under Section 14 of the Central Excise Act, 1944 and he also confirmed the fact that the value of the packing material supplied by the buyer was not included in the transaction value. It was also disclosed that the said fact was not revealed to the department. The investigation revealed that during the period from November, 1998 to August 2002, the value of such packing materials in relation to the empty drums were received by the appellants from their buyers was not included in the transaction value and same amounting to Rs. 3,90,050/- on which the duty liability was Rs. 62,408/-. Consequently, a show cause notice dated 21-10-2003 came to be issued. The proceedings were contested by the appellants without success as stated above. 4. The impugned order is so....
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.... practice of non-inclusion of cost of the packing materials supplied by the buyer in the assessable value of the finished goods was not disclosed to the department and the same was clearly admitted by the authorized signatory of the appellants on 12-5-2003. Besides, it was in the course of verification of the invoices, on 12-7-2002, that for the first time it was revealed to the department that the appellants had not included the cost of the packing materials supplied by the buyers of the malto dextrine syrup in the assessable value of the said product referred to in those invoices. Being so, according to the respondent, the department was justified in invoking extended period of limitation. As regards the Notification 313/1977-C.E., dated 8-11-1977, he submitted that it is specifically refers to "liquid glucose" and not to malto dextrine syrup, nor the exemption is with reference to the chapter sub-heading. Being so, question of grant of exemption to the said product under the said notification does not arise. He further submitted that the cost of the packing materials supplied by the buyers in relation to the malto dextrine syrup cannot be excluded from the assessable value there....
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....ven for discharge of sales obligations both in present and future. It would include even the amount paid by the buyer to the dealer or the persons selling vehicles in pursuance of the contract between the dealer or the seller and the assessee in relation to or connection with the sale of the vehicles and such payment may be in the course of sale or even after sale. Thus all deferred and future considerations add to assessable value. The theory of "flow back of consideration or part thereof' is not confined to direct monetary benefit to the assessee in connection with the sale of vehicles but rejuvenated to include consideration integrally connected with post sale obligations also and indirect benefit received in the course of or on account of sale as well as subsequent to the sale pursuant to any service rendered by the person who sells the vehicles under the contract with the manufacturer relating to the sale of the vehicles in view of meaning of transaction value as incorporated in to the provisions of section 4(3)(d) of the Act w.e.f. 1-7-2002. Sales in such type of contracts is conceived by both parties to be complete if post sales obligation are dischargeable by settled terms ....
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....sessable value thereof. 19. If one peruses the definition clause of the expression "transaction value", it refers to "any amount that buyer is liable to pay". Only restriction that has been imposed is that such payment should be "by reason of or in connection with the sale" on such goods. Thus reason of sale and inter connection thereto are essential elements to contribute for assessable value. The definition further clarifies that any such amount is "not limited to, any amount charged for ...." The expression "any" has been used twice and on both the occasions, it refers to the amount payable by the buyer. The second time use of the word "any" is preceded by the expression "but not limited to". The said expression clarifies the definition to be totally extensive in nature and not exhaustive as far as the items referred in the definition clause after, the expression "but not limited to". 20. Further perusal of definition of the term "transaction Value" does not disclose that the elements to be included in the assessable value would depend upon direct flow back of the consideration to the assessee. Such a conception shall defeat the spirit of amendment to the law. Ev....
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.... itself. 23. The expression 'transaction value' is the guiding principle in the process of ascertaining the assessable value of a product. The sale price, being paid or payable as the sole consideration, forms the base for the transaction value. Depending upon the fact situation relating to all the factors mentioned in said section 4 of the said Act, including the agreement and the arrangement arrived at between the manufacturer and the dealer or the agent in respect of sale of the product to the buyers, and the terms and the conditions thereof, the transaction value arrived at would lead to the quantification of the assessable value of the product, which in turn will determine the duty liability of the manufacturer. In the scheme of the said Act, therefore, the concept of transaction value relates to the manufacturing cost inclusive of any other amount received or receivable directly or indirectly to make the product marketable. The manufacturing of a product and the marketability thereof are inbuilt elements of the scheme of assessable value under Section 4 of the said Act". 7. Considering the law laid down in that regard in the decision of the Maruti Suzuki India....
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....The contention is totally devoid of substance. Explanation cannot override the main provision. Explanation only clarifies certain provision or aspects of the main provision. Rule 6 apparently provides that "the value of such goods shall be deemed to be aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee" to be the value for the purpose of ascertaining the assessable value. Obviously, therefore, any consideration flowing directly or indirectly from the buyer in relation to the sale transaction will have to be included in the assessable value of the product. Explanation only clarifies that even the value of the packing material which is consumed in the process of the manufacture of the product value of part of the packing material would also form part of the assessable value. In any case, the statutory expression "transaction value" under Section 4 which has been explained in detail by the Larger Bench cannot be controlled by the rules which are in the form of secondary legislation. Being so, the contention that the value of the packing material supplied by the buyer of malto d....