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TMI Blog2002 (2) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... cks/bags from their buyers M/s. Oswal Chemicals Fertilizers Limited and adjusting the said advances at the time of their delivery. Therefore, they were issued a show notice dated 2-2-2001 in which it was alleged that during the period from March, 1998 to February, 2000, they had received the money advances from the said buyers and driven the benefit to the extent of interest earned on such advances as the assessee would have incurred the interest had they borrowed the same amounts from the banks or any other financial sources. As such, the notional interest earned/accrued to the assessee on advances is an additional consideration in terms of Rule 5 of the Central Excise (Valuation) Rules, 1975 and is liable to be included in the assessabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. as under :- Sr. No. Amount (Rupees in Crore) Date of receipt of loan 1 One 07.11.97 2 One 09.12.97 3. One 29.12.97 4. One 27.01.98 5. One Jan., 1999 3. They contended that 75% of their production was being sold to M/s. Oswal Chemicals Fertilizers on the basis of prices contracted from time to time. They submitted that their sale transaction with this buyer did not involve any nexus between sale price and the loan given to them and there was no suppression in the assessable value. They further submitted that the rates charged by them from M/s. Oswal Chemicals Fertilizers Ltd. for the bags supplied to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of time for the purpose of demand of duty and imposition of penalty. 4. On considering the above reply of the party, the Commissioner of Central Excise, Jaipur in her order dated 19-7-2001 rejected the defence submissions of the noticee party and observed that the goods manufactured by them were not in scarcity for which their buyer would feel bound to provide them advances or loans and that HDPE bags are easily available in the market on competitive prices for which no buyer would give advances or loans. It is further observed that the supply to M/s. IFFCO was made intentionally to claim benefit in case of exigency; that merely supplying goods to one more customer cannot prove that the prices charged from the buyer who had given t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and confirmed the demand of Rs. 40,61,672.00 under Section 11A. She has further imposed a penalty of an equal amount on them under Section 11AC and a penalty of Rs. 10,000/- under Rule 173Q on the party apart from directing for recovery of interest on the confirmed amount of duty as per the provision of Section 11AB. 5. This appeal is against the impugned order of the Commissioner of Central Excise. We have heard Shri Jitendra Singh, ld. Advocate for the appellants and Shri M.M. Dubey, ld. JDR for the respondents. The ld. Counsel for the appellants does not dispute the facts as mentioned in the show cause notice and as considered in the impugned order of the Commissioner. He has reiterated the arguments advanced by the party before the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t., 2000 1050000 9.17 70000 8.59 Nov., 2000 1190000 8.87 140000 8.34 Feb., 2001 1120000 8.03 225000 7.52 April, 2001 980000 8.00 225000 7.42 June, 2001 1400000 7.66 450000 7.19 7. It is argued that the above two Tables giving the comparable rates in respect of similar goods purchased by M/s. Oswal Chemicals Fertilizers Ltd. from different suppliers as also the supply made by the appellants to different buyers would indicate that there is no suppression of the assessable value in respect of the bags sold by them to M/s. Oswal Chemicals Fertilizers Ltd. With regard to the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , ld. JDR for the Revenue on the other hand submits that in the show cause notice the provisions of Rule 5 of Central Excise (Valuation) Rules, 1975 are invoked in terms of which the amount of money value of any additional consideration flowing from the buyer to the assessee is liable to be added to the assessable value. He, therefore, argues that in terms of the provisions of the rule, the value of the notional interest on the advances received by the appellants from the buyers M/s. Oswal Chemicals Fertilizers Ltd. is rightly added in the assessable value of the goods sold to their buyers. We have carefully considered these submissions. In view of the fact appended in details above and the case laws relied upon by the appellants, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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