LexCOMMISSIONER OF CENTRAL EXCISE, NAGPUR-I versus M/S. INDORAMA SYNTHETICS (I) LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2015] 11S.C.R.513 COMMISSIONER OF CENTRAL EXCISE, NAGPUR-I A v .. M/S. INDORAMASYNTHETICS (I) LTD. (Civil Appeal No.1834 of 2006) AUGUST 25, 2015 [A.K. SIKRI AND R. F. NARIMAN, JJ.] B Central Excise Act, 1944: s.4 - Transaction value - Goods cleared as deemed export to advance licence holders c· at a price lower than what was being charged to the other buyers who did not hold advance licence - Additional , consideration received by the assessee on surrender of advance licence by the buyers - Inclusion of, in the transaction value - Held: Additional monetary consideration, D in addition to· the price being paid for the goods, i.e. transfer of advance import licence in favour of the ·seller by the buyer enabling the seller of the goods to effect duty free import of . the raw materials and bringing down the cost of production/procurement, is a consideration, the monetary E value of which has to be included in the transaction value under the provisions of the Rules, i.e. Rule 6 thereof- Central Excise Valuation (Determination of Price of Excisable Goods) Rule, 2000 - r. 6. F Allowing the appeal, the Court HELD: 1. As is clear from the reading of Section 4, the duty of excise is chargeable on the excisable goods with reference to the value of such goods. Generally, G the price of the goods, i.e. the price . at which such goods are ordinarily sold by'the assessee to a buyer is to be the value of the goods. This value is called the 'transaction value'. Rule 6 of the Rules specifies that if the goods are sold in the circumstances specified in H 513 514 SUPREME COURT REPORTS [2015] 11 S.C.R. A clause (a) of sub-section (1) of Section 4, then the value of such goods shall be deemed to be the aggregate of such transaction value plus the 'amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee'. The B implication of this Rule is that any form of additional consideration which flows from the buyer to the assessee, monitory value thereof is to be included while arriving at the transaction value. It is not necessary that such an additional consideration is to flow directly C and even indirect consideration is includible. [Paras 9, 1 O] [522-D-G; 524-B-C] ' 2. In the instant case, the issuance of advance licence for intermediate. supply to the assessee was D facilitated as a result of surrender of advance licence by the buyer. Thus, getting the licence invalidated for direct import of items in favour of the buyer was the trigger point for issuance of the advance licence for intermediate supply in favour of the assessee. The E assessee got the licence and it became possible only on account of sacrifice made by the buyers. Further, the buyers got their advance licences for direct import in their favour invalidated with the sole purpose of purchasing the polyester staple fiber from the assessee F at lesser price, i.e. Rs.37.50 per kg. Therefore, the argument of the assessee that benefit in the form of imports without payment of duty flows to the assessee only pursuant to and based on licence issued by DGFT to the assessee and does not flow from the invalidation G letter received by the customer from DGFT cannot be accepted. [Para 12] 525-B-E] /FGL Refractories Ltd. v. Commissioner of Central Excise, Bhubaneswar-112001 (134) ELT 230 - relied H on. COMMISSIONER OF CENTRAL EXCISE, NAGPUR-Iv. 515 INDORAMASYNTHETICS (I) LTD. Commissioner of Central Excise, Bangalore v. A Mazagon Dock Ltd. 2005 (187) ELT 3 (SC): 2005 (127) ECR 268 (SC) - held inapplicable. Commissioner of Central Excise, Bhubaneswar- II v. IFGL Refractories Ltd. 2005 (2) Suppl. SCR 480: B (2005) 6 SCC 713; Thomas v. Thomas (1842) 2 QB 851; Re Soames (1897) 13 TLR 439 - referred to. Case Law Reference 2001 (134) ELT 230 relied on. Para 2 2005 (2) Suppl. SCR 480 referred to. Para 3, 15 (1842) 2 QB 851 referred to. Para 15 (1897) 13 TLR 439 referred to. Para 16 2005 (127) ECR 268 (SC) held inapplicable.Para 21,22 CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1834 of 2006 From the Judgment and Order dated 12. 07.2005 of the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai in Final Order No. A/1417 /WZB/2005/ c D E Ill in Appeal No. E/1318/04 Mum F A. K. Panda, T.C. Sharma, Bipin B. Singh, B. Krishna Prasad for the Appellant. V. Lakshmikumaran, M.P. Devanath, Vivek Sharma, L.
Excerpt shown. Read the full judgment & AI analysis in Lexace.