TaxTMI 
TaxTMI 
2024 (4) TMI 167
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....he alleged contravention of the provisions of Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 The Valuation Rules read with Section 4(1)(b) of the Act. 3. The appellant is a manufacturer of iron and steel articles like pig iron, ingots, blooms, angles, channels, etc., falling under Chapter 72 and Chapter 73 of the Central Excise Tariff Act, 1985 The Tariff Act. The products manufactured by the appellants are sold by them at the factory gate as well as through their depots / Branch Sales Offices (BSOs) by way of stock transfers for onward sale. The appellant submits that the pricing of the goods is determined by their Central Marketing Organization (CMO) which decides the prices at which the goods are required to be sold from the plant as well as the depots / BSOs and accordingly releases the price lists for the various goods for sale. The appellant contends that apart from the price list, the CMO allows the plant as well as the depots / BSOs to provide further discounts uniformly to all buyers on the prices indicated in the price lists so as to match the price of the competitors located at various places. Thus, at the time of sale of ....
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....MPRs based on the prevalent market conditions and requirements and accordingly, invoices were raised, passing on such discounts to the customers at the time of ultimate sale. The salient features of the MPRs are as under : - i. The MPR is in the nature of trade discount, which is allowed for both direct sales from factory gate as well as dispatches to BSOs and is not refundable by the buyers under any circumstances. ii. The MPR is communicated to all the plants and BSOs for further communication to the customers. In order to arrive at the normal transaction value i.e., the value at which goods are sold from BSOs, prices mentioned in the price circular are adjusted by way of providing MPRs. Further, as per the system in vogue, for dispatch to BSOs, at the time of issuance of invoice, the system searches for transaction value for the past two months and if no transaction value is available, then the system raises invoices based on the price circular less MPRs. iii. The MPRs are shown separately on the invoices. iv. The purpose of providing the MPRs is to arrive at a realistic price prevalent in the market and correctly assess the excise duty thereon. 3.5 The appellant also a....
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....of valuation by the appellants cannot be construed as the normal transaction value for the reasons as enumerated hereinabove. He therefore supports the adjudication order and reiterates the findings. 6. We have heard the rival contentions of the two sides and perused the case records. 7. To appreciate the admissibility of discounts, it would be necessary to refer to Section 4(1) of the Act as well as Rule 7 of the Valuation Rules. The same are therefore enumerated hereunder: - ▪ Section 4(1) of the Central Excise Act, 1944: "SECTION 4. Valuation of excisable goods for purposes of charging of duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall - (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. ...." ▪ Rule ....
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.... for assessment of goods transferred to the BSO when the same is passed on to the final customers. We note that with reference to an Across the Board Rebate (equivalent to MPR), this Tribunal in the appellant's own case Steel Authority of India Ltd. v. Commr. [2006 (199) E.L.T. 112 (Tri. - Del.)] had held as under: - "8. With regard to the second ground of demand i.e. ineligibility of ABR for deduction while fixing/assessing the value, we find that the appellant had established before the lower authorities that the price realized from the buyers of the goods from the depots were invariably lower than the price at which the goods had been assessed to duty at the time of their removal from the factory. The ABRs in question were determined by the Central Marketing Organisation of the steel plant on a monthly basis and conveyed to the sales depots. It is seen that the sales depots either charged sales prices after deducting the ABRs or the ABRs are passed on to the customers through credit notes. The appellant had also produced the certificate from the Chartered Accountant showing that the ABR has actually been passed on. Before us also, the learned Counsel has produced sample invoic....