2009 (4) TMI 907 - AT - Central Excise

Valuation - inclusion of performance bonus received in the assessable value - suppression of facts - extended period of limitation - Held that - The issue is decided in the case of JALAN REFRACTORIES (P) LTD. VERSUS COMMISSIONER OF C. EX. JAIPUR 2000 (9) TMI 192 - CEGAT CHENNAI where it was held that bonus received after clearance of goods for better performance is not includible in the assessable value - demand of duty do not sustain. Once the duty demand is not sustainable interest and penalty cannot be levied. Appeal allowed - decided in favor of appellant.

Summary

The Appellate Tribunal CESTAT Bangalore, consisting of Members Shri T.K. Jayaraman and M.V. Ravindran, heard appeals from both the Revenue and the assessee against an order passed by the Commissioner of Central Excise (Appeals-I), Bangalore. The case involved manufacturers of refractory bricks who had a performance bonus clause in their contract with M/s. SAIL. The main issue was whether the performance bonus received should be included in the assessable value. The Revenue alleged suppression of facts and demanded differential duty, interest, and penalty. The Commissioner (Appeals) ruled that the performance bonus was includible in the assessable value but limited the longer period for invoking duty to before July 2002. The Tribunal, after considering the merits and limitation, found in favor of the assessee. Citing relevant case laws, including Jalan Refractories, the Tribunal concluded that the bonus received after clearance of goods for better performance should not be included in the assessable value. Therefore, the duty demand was not sustainable, and interest and penalty could not be levied. Consequently, the assessee's appeal was allowed, rendering the Revenue's appeal moot. The order was pronounced in open court at the conclusion of the hearing.