2013 (12) TMI 806 - AT - Central Excise

Duty levied on Transaction value of coal Royalty paid for extraction to be added or not Waiver of Pre-deposit Held that - No transaction shall see the light of the day without royalty being added to the extracted value of coal as a direct cost incurred to make the coal to reach surface and marketable - sale consideration is fixed on the basis of cost incurred (both fixed cost and variable cost) to extract coal - it is inconceivable how transaction value shall not comprise element of royalty the appellant is directed to deposit Rupees Seventy five lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

The Appellate Tribunal CESTAT NEW DELHI ruled that excise duty on coal should include royalty paid for extraction. The appellant's challenge was rejected as royalty is a direct cost in making coal marketable. The appellant was directed to deposit Rs. 75 lakhs within 4 weeks.