2019 (5) TMI 1016

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....he appellants have cleared 54 No. of Gear boxes to M/s. Municipal Corporation of Mumbai availing exemption under No.6/2006-CE dated 1.3.2006; they have reversed 10% of the value of the goods and have recovered the same from their customers; this 10% amount was separately shown in the invoices; the appellants are required to pay 10% of the amount thus recovered. A show-cause notice dated14.11.2007 was issued and was confirmed by the original authority vide Order-in-Original No.30/2008 dated27.8.2008 which was upheld by the Commissioner (A) vide Order-in-Appeal No.66/2009 dated 8.7.2009 which is under appeal. 2. Learned counsel for the appellants has submitted that the order incorrectly interprets that amount reversed under Rule 6(3)(b) of....

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..... For example, if the value is 100 and 10% of the same that is Rs. 10 is shown separately in the invoice, as per the argument of the Department the value should be taken as Rs. 110/-. Assuming the department's contention to be correct, the invoice should show Rs. 110/- as value and 10% of the same i.e., Rs. 11/- should be shown separately and recovered from the customers. Then, the argument can continue that Rs. 11/- separately shown should be included to the value shown i.e., Rs. 110/- making the correct value to be Rs. 121/-. 2.3 Learned counsel also submits that the period of dispute is May 2005 to March 2006 and show-cause notice was issued on 24.11.2007, which is beyond normal period. Department being aware of the practice of the ap....

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.... to be not in consonance with the law, as the assessable value is defined under the provisions of the Central Excise Act and the provisions of Section 4 categorically talks about the 'transaction value of the goods'. Even applying broadly the proposal of the taxation, cost of the exempted goods needs to be considered as a whole and claim of reduction for 10% of credit towards consumption of the common inputs cannot be upheld as the price of exempted goods is not determined as per provisions of law. In our view the reversal of 10% of the price of the exempted goods is not for maintaining separate account of inputs used in the manufacture of exempted and is an option extended and exercised, cannot be held as compulsory exaction of money for t....