TaxTMI 
TaxTMI 
2019 (4) TMI 1412
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....298/- has been charged upon the assessee. 2. The Adjudicating Authority confirmed the demand of Rs. 50,298/- along with interest and imposed penalty of equal amount under Section 11AC of the Central Excise Act, 1944. 3. On appeal, the Ld. Commissioner (appeals) upheld the Adjudication Order and rejected the appeal filed by the assessee. Hence, the present appeal before the Tribunal. 4. The Ld. Advocate appearing on behalf of the appellant submits that they are manufacturing Textile Machinery Spares. No packing is required for marketing the said goods. Only in some cases, packing is done at the instance of the buyers for protecting the goods in transit. It is the case of the appellant, that the cost of such packing and forwarding charges is not includible in the assessable value prior to 01/07/2000 and even thereafter on the introduction of the transaction value. The Ld. Advocate further argued that the demand is also barred by limitation as period of dispute is from 01/04/2000 to 08/08/2003 and the Show Cause Notice was issued only on 24/03/2005. The Ld. Advocate further contended that the commercial invoices raised for realizing Packing and Forwarding charges were being mai....
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....rence may be adopted for the purpose of determining the measure of the levy. Any standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy." 15. A reading of Section 4 of the Act, as originally enacted; as amended by 1973 Amendment; and as further amended by 2000 Amendment would clearly show that the value of the article for the purposes of levy of ad valorem duty was with reference to the price i.e. 'normal price' prior to the 2000 Amendment and thereafter with reference to the 'transaction value' which has been defined (already extracted) to mean "the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price......." 16. The measure for the purpose of the levy is, therefore, essentially the price charged in respect of a transaction which must necessarily be at arm's length. Inclusions and additions that enrich the value of the Article till its clearance are permissible additions to the price that can be taken into account to determine 'value' under the old Section 4 (prior to 2000) as well as the 'transaction value' under the amended sec....
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....t of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale. Now these are clear provisions expressly providing for deduction, from the price, of certain items of expenditure. But Learned Counsel for the assessees contend that besides the heads so specified a proper construction of the section does not prohibit the deduction of other categories of postmanufacturing expenses. It is also urged that although the new Section 4(4)(d)(i) declares that in computing the "value" of an excisable article, the cost of packing shall be included, the provision should be construed as confined to primary packing and as not extending to secondary packing. The heads under which the claim to deduction is made are detailed below : (1) Storage charges. (2) Freight or other transport charges, whether specific or equalised. (3) Outward handling charges, whether specific or equalised. (4) Interest on inventori....
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.... or places where it is sold. The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place or places of delivery." (Underlining is ours) 20. We find no room whatsoever for any disagreement with the above view taken by this court in Bombay Tyre International Ltd. (supra). It is a view consistent with what was held by the Federal Court and the Privy Council in Central Provinces and Berar (supra) Boddu Paidanna (supra) and Province of Madras (supra) and the decisions that followed thereafter including the decision in Voltas Limited (supra) and Atic Industries Limited v. H.H. Dewa. Asstt. Collector of Central Excise and ors - (1975) 1 SCC 499 = 1978 (2) E.L.T. (J444) (S.C.) the true purport of which was explained in Bombay Tyre International Ltd. (supra). Both the above opinions were clarified to mean that neither of them lay down any proposition to the effect that the excise duty can be levied only on the manufacturing cost plus the manufacturing profit only. 21. At this stage, the amendment to Section 3 by substitution of the words "a duty of excise on all excisable goods" by the words "a duty of ....
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....of Section 4(3)(d) to Section 3 of the Act was expressed and has to be understood. If so understood, we do not see how the views expressed in paragraph 84 of Acer India Ltd. (supra) can be read to be in conflict with the decision of Bombay Tyre International Ltd. (supra). 23. Accordingly, we answer the reference by holding that the measure of the levy contemplated in Section 4 of the Act will not be controlled by the nature of the levy. So long a reasonable nexus is discernible between the measure and the nature of the levy both Section 3 and 4 would operate in their respective fields as indicated above. The view expressed in Bombay Tyre International Ltd. (supra) is the correct exposition of the law in this regard. Further, we hold that "transaction value" as defined in Section 4(3)(d) brought into force by the Amendment Act, 2000, statutorily engrafts the additions to the 'normal price' under the old Section 4 as held to be permissible in Bombay Tyre International Ltd. (supra) besides giving effect to the changed description of the levy of excise introduced in Section 3 of the Act by the Amendment of 2000. In fact, we are of the view that there is no discernible difference in t....