2005 (8) TMI 486 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty imposed for non-payment of duty on certain costs like Royalty, Advertisement, Business Promotion, and Commission.
2. Dispute regarding inclusion of expenses in the transaction value for the purpose of paying Central Excise Duty.
3. Applicability of excise valuation provisions and acceptance of full sale price as consideration for goods sold.

Analysis:

1. The judgment involves a duty demand of over Rs. 3 lakhs and a penalty of Rs. 50,000 imposed on the appellant for not paying duty on costs related to Royalty, Advertisement, Business Promotion, and Commission. The Commissioner (Appeals) found that the expenses enhancing the marketability of the final product should have been included in the transaction value for duty payment.

2. The issue of dispute revolved around whether the expenses incurred towards Royalty, Advertisement, Business Promotion, and Commission were included in the transaction value for Central Excise Duty payment. The appellant failed to provide sufficient evidence to prove that these expenses were part of the transaction value, leading to the demand being proposed and considered maintainable.

3. The judgment emphasized the principle that the assessable value of excisable goods is based on the wholesale price, regardless of whether it results in profit or loss. The appellant contended that duty was already paid on the full sale price of goods, and there was no need to separately pay duty on individual cost items. The adjudicating authority accepted the sale price as full consideration, and the Commissioner (Appeals) failed to show evidence of the appellant collecting additional costs separately or reducing them from the sale price for excise valuation. Consequently, the impugned order was deemed contrary to the Central Excise Act's valuation provisions, leading to the findings and demands being set aside, and the appeal being allowed with any consequential relief.