2017 (5) TMI 1462 - AT - Central Excise

Valuation - it appeared to the Department that they had collected 5% of the list price over and above the value declared in the Central Excise invoice. It was alleged that the said difference thereof relating to 5% of commercial invoice was required to be allowed in the transaction value for payment in terms of section 4(3)(d) of the CEA - Held that - the very same issue has been decided by this Tribunal in their own case 2008 (2) TMI 105 - CESTAT, CHENNAI , where it was held that discount given was a purely commercial one and admissible for deduction from the list price in determining the assessable value - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Alleged collection of excess amount over the declared value in Central Excise invoice.
2. Discrepancy in the price indicated in commercial invoice compared to the assessable value.
3. Interpretation of section 4(3)(d) of the Central Excise Act regarding transaction value.
4. Admissibility of discounts in determining the assessable value.
5. Precedents related to discounts and assessable value.
6. Comparison with previous Tribunal decisions and Supreme Court affirmations.

Analysis:
1. The case involved allegations of collecting 5% over the declared value in Central Excise invoice by manufacturers of electric motors and mono block pumps. The Department issued show cause notices for demanding differential duty based on this discrepancy.

2. The Department pointed out that the commercial invoice indicated a higher price than the assessable value in the Central Excise invoice, raising concerns about the accuracy of pricing and issuance of credit notes post-commercial invoice issuance.

3. The interpretation of section 4(3)(d) of the Central Excise Act was crucial in determining the transaction value and whether the alleged excess collection should be allowed in the transaction value for duty payment.

4. The Tribunal considered the admissibility of discounts in arriving at the assessable value. It was argued that any discount actually passed on to buyers should be eligible for deduction from the list price for determining the assessable value.

5. Precedents such as the Mahavir Spinning Mills case and Maruti Udyog Ltd. case were cited to support the admissibility of discounts in determining the assessable value. The Tribunal referred to the Bombay Tyres International case to emphasize that discounts known prior to goods' removal for sale should be deducted from the assessable value.

6. The Tribunal compared the current case with its previous decision in the Pump Division case and noted the Supreme Court's affirmation of the Mahavir Spinning Mills case. Ultimately, the Tribunal upheld the orders of the lower authorities, dismissing the Department's appeal due to the lack of merit based on established legal principles and precedents.

This detailed analysis of the judgment highlights the key issues, legal interpretations, precedents, and the final decision rendered by the Tribunal.