TaxTMI 
TaxTMI 
2010 (10) TMI 997
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....ction 11AB of the Central Excise Act on the differential amounts of duty paid by them under supplementary invoices subsequent to clearance of the goods. To take one instance, M/s. Endurance Technologies Pvt. Ltd. had cleared their final products (motor vehicle parts and accessories) from March 2006 to June 2007 on payment of duty based on the price initially agreed between them and their customers. Subsequently, the parties to the contract of sale of the goods invoked the price-escalation clause of the contract and consequently a higher price was agreed to be paid to the appellant. Accordingly, the appellant issued supplementary invoices to their customers for recovering the differential price from them and paying the differential duty on t....
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....peals are against orders of the Commissioner (Appeals) who sustained the orders of the original authority for recovery of interest under Section 11AB. 2. The learned Senior Advocate for the appellants submitted that the issue was squarely covered in their favour by the Karnataka High Court's judgment in the case of CCE, Bangalore-III v. Bharat Heavy Electricals Ltd. - 2010-TIOL-437-HC-KAR-CX = 2010 (257) E.L.T. 369 (Kar.). He submitted that the Hon'ble Supreme Court's decision in the case of CCE, Pane v. SKF India Ltd. - 2009 (239) E.L.T. 385 (S.C.) was correctly distinguished by the High Court in BHEL case. He submitted that the concept of 'transaction value' was neither argued nor considered in the case of SKF India Ltd. The learn....
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.... items which are charges ad hoc or under a contract which have nothing to do with the price element which has already crystallized in the forefront of Section 4(3)(d) by the words "price actually paid or payable for the goods when sold". 7. The legislative intent in introducing the Transaction Value was to remove the inherent uncertainty in Valuation which had existed from the days of the old Section 4 (prior to 1975) where the price was a "like" price and the old section 4 (Normal Price) which was not ascertainable and was a deemed price. 8. The concept of Transaction Value is a price which applies to each clearance by virtue of the words in Section 4(1) "...then, on each removal of goods, such value shall...". The concept ....
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....ly paid under the supplementary invoices. These payments were covered by sub-section (2B) of Section 11A of the Central Excise Act and, therefore, interest on the differential duty was also payable under Section 11AB of the Act. The learned SDR submitted that this liability of the appellants to pay interest was unquestionable in view of the Hon'ble Supreme Court's decision in SKF case (supra). He also relied on the Apex Court's judgment in Commissioner v. International Auto Ltd. - 2010 (250) E.L.T. 3 (S.C.). The High Court decisions cited by the learned counsel did not reflect the correct position of law on the point. The SDR pointed out that the decision in BHEL case was under appeal to the Supreme Court and that the decision in Rucha Engi....
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....tion value" stand negatived by the above decisions of the apex court. A reason stated by the learned counsel to rule out the applicability of the apex court's ruling to the present cases is that the Supreme Court's judgment in SKF case is silent about "transaction value". But we find that their lordships have repeatedly observed in their judgment in SKF case that the assessee issued supplementary invoices to their customers, demanding "the balance of the revised prices". In other words, what was collected by the assessee under supplementary invoice from their customer was the difference between the original price and the revised price of the goods. This differential price is clearly a part of "the amount charged as price" mentioned in the d....
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....herefore, the price indicated by the supplementary invoice is directly relatable to the value of the goods on the date of clearance, hence, enhanced duty. This enhanced duty is on the corrected value of the goods on the date of removal." This is the ratio of the Hon'ble Supreme Court's decision in SKF case as reiterated in International Auto case and the same is impliedly based on the definition of 'transaction value'. The applicability of the apex court's ruling to the present cases cannot be questioned by mere reason of non-mention of the term "transaction value" in its judgments. 6. In the case of BHEL involving apparently similar set of facts, the Hon'ble Karnataka High Court held that the payment of differential duty on the goo....