2019 (4) TMI 586 - SC - Central Excise

Valuation - inclusion of Dharmada charges (charitable donation from customers) in the assessable value - According to the Respondent, the Dharmada was meant for charity and was accordingly credited to charity - Held that - The amount of Dharmada cannot be included in the transaction value for the purposes of assessments - The present case has been tagged with the case of M/s D.J. Malpani vs. Commissioner of Central Excise, Nashik 2015 (7) TMI 1118 - SUPREME COURT - appeal dismissed.

Summary

Issues:
1. Whether Dharmada should be added to the assessable value for the payment of central excise duty.
2. Interpretation of relevant provisions of the Central Excise Tariff Act, 1985 regarding charitable donations like Dharmada.
3. Applicability of previous judgments in similar cases to the present dispute.

Analysis:
Issue 1: The central issue in this case revolves around whether Dharmada, a charitable donation added to the price of goods by the Respondent, should be included in the assessable value for the payment of central excise duty. The Deputy Commissioner initially held that Dharmada should be added, but the CESTAT, following its previous judgment and the Supreme Court's decision in a related case, ruled in favor of the Respondent, stating that Dharmada was not liable to be added to the assessable value.

Issue 2: The interpretation of the relevant provisions of the Central Excise Tariff Act, 1985 was crucial in determining the treatment of Dharmada in the assessable value. The Commissioner (Appeals) and the Deputy Commissioner both held that Dharmada should be included, but the CESTAT disagreed, citing its previous judgment and the Supreme Court's decision in a similar case to support its conclusion that Dharmada should not be part of the assessable value.

Issue 3: The application of previous judgments in similar cases played a significant role in the final decision of the Supreme Court. The Appellant argued for following a previous decision in Collector vs. Panchmukhi Engineering Works, asserting that Dharmada should be included in the assessable value. However, the Supreme Court, considering the precedent set in M/s D.J. Malpani vs. Commissioner of Central Excise, Nashik, dismissed the appeal, affirming that Dharmada cannot be included in the transaction value for assessment purposes.

In conclusion, the Supreme Court upheld the decision of the CESTAT and ruled that Dharmada should not be added to the assessable value for the payment of central excise duty, based on the interpretation of relevant provisions and the application of previous judgments in similar cases.