2010 (10) TMI 1159 - AT - Central Excise

Summary

Issues involved: Interpretation of transaction value u/s 4(3)(d) of Central Excise Act for inclusion of additional charges in assessable value.

Summary:
The appeal before the Appellate Tribunal CESTAT NEW DELHI arose from an order passed by the Commissioner (Appeals), Ghaziabad, confirming a demand against the appellants for collected amounts on account of freight and charges. The appellants, engaged in manufacturing transformers, had collected certain amounts from customers which were not disclosed at the time of assessment. The adjudicating authority held that these amounts should have been included in the assessable value of the final products. The Commissioner (Appeals) also upheld this decision, citing the definition of transaction value under Section 4(3)(d) of the Central Excise Act.

The departmental representative referred to a decision by the Larger Bench in the case of CCE, Mumbai-III v. Supreme Petrochem Ltd., emphasizing that transaction value includes any amount that the buyer is liable to pay in connection with the sale. The Larger Bench's decision highlighted the importance of transaction value in determining the assessable value of goods based on the terms of the sale contract between the seller and the buyer.

Considering the facts of the case where the collected amounts were over and above the invoice price for freight and charges, the Tribunal found no fault with the lower authorities' decision to include these amounts in the assessable value. The Tribunal dismissed the appeal based on the law laid down by the Larger Bench, affirming the inclusion of the additional charges in the assessable value as per the provisions of the Central Excise Act.