2015 (9) TMI 1085 - SC - Central Excise

Valuation of goods - Determination of assessable value - mutuality of interest - Held that - Tribunal s findings are pure findings of facts after analysing the documents on record and does not call for any interference. There is also a finding recorded by the authorities below that the assessee was the real manufacturer and not M/s. Nestle. - Decided against Revenue.

Summary

Issues involved:
Dispute over pricing charged by the assessee from M/s. Nestle due to an advance given by M/s. Nestle, Impact of advance on pricing, Mutuality of interest between parties, Value at which excise duty was payable, Whether the assessee was the real manufacturer.

Analysis:
The judgment by the Supreme Court involved a dispute regarding the pricing charged by the assessee from M/s. Nestle, arising from an advance of &8377; 4.5 crores given by M/s. Nestle to the assessee. The Revenue contended that this advance influenced the pricing, leading to the assessee not charging the normal market price from M/s. Nestle for the supply of chocolates. The issue was addressed through Show Cause Notices issued to the assessee, questioning the differential duty demanded. In response, the assessee argued that the advance was for the purchase of machinery, constituting a lone transaction independent of the trading relationship, and did not impact the normal pricing charged from M/s. Nestle.

The Commissioner accepted the assessee's contention, finding no mutuality of interest between the parties and determining that the price at which goods were sold to M/s. Nestle would be the value for excise duty payment. This decision was upheld by the Customs, Excise and Service Tax Appellate Tribunal, which emphasized the independence of the job worker's pricing from the advance given by M/s. Nestle. The Tribunal cited relevant judgments, including those of M/s. Pawan Biscuits Ltd. and M/s. Ujagar Prints, to support the decision based on the absence of flow back of funds and the principal-to-principal relationship between the parties. Additionally, the authorities affirmed that the assessee was the actual manufacturer, not M/s. Nestle, further solidifying the decision.

In light of the factual findings and legal analysis presented, the Supreme Court dismissed the civil appeal, affirming the orders passed in previous appeals. The judgment underscored the importance of analyzing the specific circumstances, mutuality of interest, and independence of pricing in determining excise duty liability, ultimately upholding the decision in favor of the assessee.