TaxTMI 
TaxTMI 
2020 (4) TMI 239
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....ubmissions made in the appeal. Accordingly, the matter has been taken up for disposal even in the absence of any representation from the appellant. 2. Heard Ld. DR and perused the records. 3. The appellants are manufacturers of pre-stressed cement concrete sleepers which they supply to Indian railways and some other organisations on contract basis. The agreements entered into between Indian Railways and the appellant provide for- a) The price is fixed as per BG sleeper or per set. b) The accepted rate shall be inclusive of the cost of labour and input materials such as cement, HTS wire and inserts etc. including all handling charges and duties thereon except the cost of transportation of HTS wire, inserts and cement ....
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.... them but not reimbursed by the Indian Railways. 6. It appeared to the department that the entire cost of transportation of input materials must be included in the assessable value for payment of Central Excise Duty. Accordingly, they issued a show cause notice dated 31.10.2008 demanding Central Excise Duty on differential amount, under proviso to Section 11A (1) on the differential transportation charges incurred on the inputs during the period October 2003 to March 2008. Interest on this amount was proposed to be recovered under section 11AB and the mandatory penalty was proposed to be imposed under section 11AC. Further, penalties were proposed to be imposed under Rule 25 of Central Excise Rules, 2002 for alleged contravention of Rule....
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....e normal price, i.e., the price at which such goods are ordinarily sold in the course of wholesale trade for delivery at the time and place of removal. This concept was replaced with the concept of transaction value in the year 2000 and Section 4 of Central Excise Act was completely revised. The implication of this change is that prior to the year 2000, the value had to be determined as per normal price under Section 4. For this purpose, a price list would be submitted by the manufacturer which would be examined and after reckoning various elements such as trade discount, transportation etc., the officers would approve the price list. Once the price list is approved, the duty had to be paid on the value approved in the price list. After the....
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....s, in the case of capital consumption or transfer to sister units, the Central Excise Valuation Rules have to be followed. In this particular case, there is no dispute that there was indeed a sale of sleepers by the appellant to the Indian Railways. The price is all inclusive, as can be seen from the terms of the contract i.e., it includes the cost of raw material, labour etc., but with only one additional amount being paid by the Indian Railways to the appellant. This was the cost of transportation of inputs in consumption i.e. HTS wire and Inserts, as per some specific norms indicated in the agreement. It does not matter whether the actual amount of freight paid by the appellant was higher but the reimbursement will be confined to the amo....