TaxTMI 
TaxTMI 
2026 (3) TMI 1146
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....tion of the investigation, show cause notice was issued on 15.07.2010 for the period from April 2005 to December 2009 and show cause notice dated 14.03.2011 was issued for the period from January 2010 to March 2010. Thereafter, one more show cause notice dated 09.05.2011 was issued for the period from April 2010 to September 2010. The first show cause notice was adjudicated by the Adjudication Authority vide order dated 31.01.2012. Aggrieved by said orders, appeal was filed before this Tribunal, and this Tribunal vide Final Order No. 25184-25189/2013 remanded the matter for Denovo Adjudication observing that there was negation of natural justice in the original adjudication proceedings. In the Denovo Adjudication, the documents procured by the investigation officer from M/s. Karnataka State Transport Corporation (KSRTC) were supplied to the Appellant as requested and thereafter Adjudication authority after extending opportunity for personal hearing issued the impugned order confirming the demand along with interest and penalty all the 3(three) show cause notices. Aggrieved by the said order, present appeal is filed. 4. When the appeal came up for hearing, the Learned Counsel for....
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.... the Learned Counsel draws our attention to the charts showing the year wise details of the transactions and the same is appended below: - 2005 - 06 Sl. No. Description Amount in Rupees 1 Total value as per SCN Dated 15.07.2010 (Cum cat and cum duty value) 4,65,27,854 2 Less VAT @12.5% ON PCTR 4, 66841Kgs & Black vulcanizing Cement (BVC) 33,354 Lts, VAT 4% ON 5,489.0 Kgs Bonding Gum 53,16,016 4,12,11,838 3 Less Pro-rata recovery (Actual) - Deducted by KSRTC. For failure of performance guarantee. 34,11,009.00 3,78,00,829.00 4 Less cash discount (Actual) as per the tender clause & deducted by KSRTC 3,07,188.00 3,74,93,641.00 5 Less Equalize freight on clearances of PCTR, BG, BVC of 4,66,841 KGS +5,489 Kgs +33,354 liters @Rs.2/- per Kg on equalized freight basis as per quantity reflected by SCN 11,10,152.00 3,63,83,489.00 6 Less exemption limit Notification No.08/2003 dt as amended in 2005 1,00,00,000.00 7 Value 2,63,83,489.00 8 Duty liability for A.V. of Rs.2,63,83,489/[email protected]% Rs.43,05,785.00 9 Demand hi....
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....s per tender clause and deducted by KSRTC Rs.12,68,831.00 3,59,21,646/- 7 Less freight on clearances of PCTR, BG, BVC of 5,36,737 Kgs + 45,830 Kgs +31,680. Litres @ Rs.2 per Kg on average basis quantity as reflected in SCN Rs. 12,28,554.00 Rs.2,45,58,378.00 8 Less SSI exemption limit under Notification No.08/2003 Rs.1,50,00,000.00 9 Value Rs.95,58,378.00 10 Duty liability 2007-08 of A.V.95,60,378.00 @16.32% Rs.15,59,927.00 11 Less Duty Paid through CENVAT CREDIT BALANCE. Rs.9,15,209.00 12 Normal period is 1 year considered, Demand is nil NIL 13 Balance amount Payable Rs.6,44,718.00 2008 - 09 Sl. No. Description AMOUNT IN RUPEES 1 Total value as per SCN Date: 15/07/10. (Cum cat and cum duty value) Rs.8,49,74,009.00 2. Repair and resole of tyres to Hubli NWKSRTC vide Tender No. T08 DT.26.12.2007. Rs.45,66,889.00 Rs.8,04,07,120.00 3 Less value Traded goods cleared under commercial Invoices/Trading Invoices as per tender Rs.3,53,94,794.00 Rs.4,50,12,326.00 4 Less VAT @ 12.5% on PCTR, BV....
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....scount, the Learned Counsel submits that the said cash discount is availed by the M/s. KSRTC and Appellant had furnished the entire details regarding such deduction. However, the Adjudication authority denied the same, on the ground that as per Section 4 of the Central Excise Act, 1994, discount extended to customers is a permissible deduction, if it is established that for a given transaction, the discounts are actually being passed on to the buyer of the goods. In the present case, Appellant could produce evidence only for amount of Rs. 1,15,245/- in respect of the invoices as stated in the impugned order and for remaining amount of Rs. 24,66,772/- claimed as deduction towards discount got rejected. In this regard, Learned Counsel submits that the Adjudication Authority has totally ignored the letter of intent and purchase order and terms and conditions between the Appellants and Karnataka State Road Transport Corporation (KSRTC). In support of the above submission, Learned Counsel drew our attention to the purchase orders referred in para ibid. The Appellant had also drawn our attention to the detailed working of all these years which was submitted before the Adjudication A....
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....of such goods cannot be accepted. Learned Counsel submits that once the invoices relied by the appellant are showing no excise duty it is to be understood that it is related to trading activity. 11. As regards deduction on account of freight, Learned Counsel submits that as per the estimate and costing, the Appellant equalize the rate of freight of goods to M/s. KSRTC as Rs. 2/kg of thread rubber supply and accordingly, they are entitled for deduction of Rs. 29,61,942/- from the assessable value. This claim is also rejected on the ground that the Appellant has not shown the cost of transportation in their invoices and not produced any evidence to show that the deduction on the actual transportation incurred by them. It is evident that M/s. KSRTC has paid the invoice value after deduction of freight charges, wherever KSRTC has arranged transportation of goods from the factory to their premises. Learned counsel for the appellant further submits that Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 clearly provides that if the excisable goods are sold for delivery at a price other than place of removal, then the value of such goods shal....
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.... and Adjudication Authority rightly confirmed the demand and penalty. 14. Heard both sides and perused the records. 15. As regards invoking extended period of limitation, we find that all sales are affected under a proper invoice, and all payments are made through an account payee cheque. Further, we find that the entire sales were made by the Appellant to the M/s. KSRTC, a Government of Karnataka undertaking and against invoices and in the absence of any allegation, evidence on record or in the absence of any allegation that the Appellant had cleared the goods without an invoice, no suppression or mis-statement for evasion of duty can be alleged and due to that reason, demand confirmed by Adjudication Authority invoking the extended period of limitation is unsustainable. 16. As regards deduction on pro rata recovery, it is true that pro rata recovery was made on lump sum basis in the bills that were due for payment and the same is not made on respect of invoices of the goods which failed to perform the guaranteed levels. However, there is no dispute that the terms of purchase as per the purchase order provided for such deductions. There is no allegation that there was no ....