TaxTMI 
TaxTMI 
2019 (9) TMI 1521
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....t, 1944 along with interest for the period from April 2003 to March 2008. Equivalent penalty of Rs. 8,01,81,838/- was also imposed under Section 11AC of the Central Excise Act, 1944 along with penalty of Rs. 1 crore under Rule 25 of the Central Excise Rules, 2002. 2. Initially this Tribunal vide order dated 15.06.2009 had directed for pre-deposit of 50% of the duty. Aggrieved, the respondent preferred a writ petition before the Hon'ble Calcutta High Court vide WP 1105 of 2009. The Hon'ble High Court vide order dated 06.01.2014 set aside the order of the Tribunal and remanded the matter with a direction to decide the question of pre-deposit afresh. The department preferred an appeal before the Hon'ble Division Bench of the High Court agains....
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....the value of the axles supplied by the appellants which is many times more than excise duty on axles. 8. 1.9% of the invoice amount is paid as finance charges/bill discounting charges to its bank by TML when it purchases the raw material. Thus, vendors of TML are able to obtain immediate payment for supplies made to TML, due to bill discounting facility extended by banks to TML. Therefore, vendors of TML give discount to TML in their sale price to TML to the extent of 1.9%. The transaction value of the inputs were determined by reducing 1.9% from the price of the inputs which was payable by the said assessee to the bank. 9. The department proceeded to issue a Show Cause Notice on the premise that while considering the value of raw materia....
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....tion. 12. It was further submitted that the said charges of 1.9% paid by TML to their bankers as interest was not includible in the assessable value of the goods (raw material) supplied by the suppliers to TML. On the same reasoning, the value of the raw material supplied by TML for job work in the hands of the appellant will also not include discount of this 1.9%. Hence, it was contended that the case made out by the department to include this amount of 1.9% in the value of the axles cleared by reworking the cost of production is erroneous. 13. The learned Advocate drew the attention of the bench to an order passed by the same Commissioner wherein he had dropped the demand for a similarly placed assessee namely, M/s JMT Auto. 14. It was....
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....t between their buyer and the bank. What they received from their buyer was only the discounted price of the goods. The question which arises for consideration is whether the interest paid by the buyer to their bankers under the financial arrangement between them, which the assessees had nothing to do with, requires to be included in the assessable value of the goods. We have noticed two Circulars of the Board being No. 354/81/2000-TRU, dated 30.06.2000 and No. 643/34/2002-CX, dated 01.07.2002, which clarified the point. Accordingly, the net price of the goods, after cash discount allowed by the seller to the buyer in a case of immediate of reasonably prompt payment of sale price by the latter, must be accepted as the assessable value of th....
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....sessees. There ends the transaction between the assessees and their buyer. If the buyer delays remittance to their bankers under the above scheme, it was for them to pay interest on the moneys. This was precisely what was done by M/s TELCO Ltd. and their bankers did not confer any monetary benefit on the assessees. Presumably, it was in similar circumstances that the Board clarified the point in the respective circulars. 4. Shri Ravi Raghavan, Counsel for some of the appellants also referred to Order-in-Appeal No. 56/2005 (M-II), dated 25.10.2005 passed by the Commissioner of Central Excise (Appeals), Chennai, wherein the appellate authority, on a similar set of facts, took the view that the interest received from the buyer of the goods b....