2009 (4) TMI 823 - AT - Central Excise

Summary

Issues:
Includibility of 'Performance Guarantee Bonus' in assessable value; Applicability of extended period for demand; Imposition of penalty and interest under Sections 11AC and 11AB respectively.

Includibility of 'Performance Guarantee Bonus' in assessable value:
The appeal challenged the inclusion of a 'Performance Guarantee Bonus' in the assessable value of Fired and Unfired Refractory Bricks supplied by the appellants to steel plants. The Revenue claimed the bonus as part of assessable value, leading to duty demands and penalties. The appellants argued that the bonus was not linked to the sale price at the time of clearance and should not be included. They cited various case laws supporting their stance, emphasizing that post-sale provisions like bonuses should not affect assessable value. The Tribunal agreed with the appellants, citing precedents like Jalan Refractories and MPR Refractories Ltd., which held that such bonuses were not part of the assessable value, as they were unrelated to the sale price at the time of removal. The impugned order was set aside, and the appeal was allowed.

Applicability of extended period for demand:
The appellants contended that the demand was time-barred, arguing that the extended period should not have been invoked. They referenced case laws like Nizam Sugar Factory and Hyderabad Polymers, asserting that when a Show Cause Notice for the same issue was issued earlier, the extended period could not be applied. The Tribunal noted that the issue was settled in decisions like Indian Telephone Industries and Burn Standard Co. Ltd., emphasizing that the extended period could not be invoked in such cases. The Tribunal found in favor of the appellants, highlighting that the extended period was not applicable, further supporting the appellants' position on the limitation aspect.

Imposition of penalty and interest under Sections 11AC and 11AB:
The appellants challenged the imposition of penalties under Section 11AC and interest under Section 11AB, arguing that these provisions were not applicable due to the circumstances of the case. They relied on the Tribunal's decision in Al-Falah (Exports) v. CCE, Surat, which stated that if the proviso clause under Section 11A was not applicable, penalties under Section 11AC could not be imposed. The Tribunal concurred with the appellants, holding that since the proviso to sub-section (1) of Section 11A was not invocable against the appellants, penalties and interest under Sections 11AC and 11AB were not justified. The impugned order was set aside, and the appeal was allowed with consequential relief.

---