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TMI Blog2010 (8) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... corollary to exclusion of the actual cost of transportation from the assessable value. The excess freight collected from the dealers was only a profit on transportation and not an “additional consideration” within the meaning of this expression used in Rule 6, nor an “additional amount” within the meaning of the definition of “transaction value” under Section 4(3)(d) of the Act Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... in short-payment of duty. Undervaluation was also generally alleged. Apart from demanding differential duty from the assessee, these show-cause notices also demanded interest on duty under Section 11AB of the Act and proposed penalties under Rule 25 of the Central Excise Rules, 2002. The demand of duty and other proposals were contested by the party. In adjudication of the dispute, the original authority confirmed the demand of duty against the assessee under Section 11A of the Act with interest thereon under Section 11AB of the Act and also appropriated the payments earlier made by the assessee under protest, towards this demand. However, no penalty was imposed on the assessee. An appeal filed by the assessee against the demand of duty and interest thereon was rejected by the Commissioner (Appeals). The present appeal is directed against the appellate Commissioner's decision. 2. Learned Counsel for the appellant has submitted that what was collected by them from the dealers in excess of the actual cost of transportation was only a profit on transportation and hence the same was not liable to be included in the assessable value of the goods under Section 4 of the Act. It is submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven without pronouncing on the point, the point passes sub silentio." According to the learned Consultant, the Tribunal's decision in Kothari Sugar & Chemicals case (supra) on the valuation dispute for the period from 1-7-2000 should be considered sub silentio and hence not liable to be followed as a precedent. The learned Consultant has also claimed support from Standard Alkali v. Commissioner of Central Excise - 2010 (252) E.L.T. 65 (Tri.-Mum.), wherein a distinction was found between the concept of normal value (deemed price) which was in vogue prior to 1-7-2000 and the concept of transaction value which was introduced on the said date. The learned Consultant has also referred to Trace Air Conditioning Systems Ltd. v. Commissioner of Central Excise - 2005 (180) E.L.T. 327 (Tri.-Bang.) read with Trac Air Conditioning Systems Ltd. vs. Commissioner of Central Excise - 2006 (198) E.L.T. 148 (Tri.-Bang.), the former being a final order passed by the Bench and the latter being a corrective order passed on ROM application filed by the appellant. The endeavor of the learned Consultant is to show that the ratio of Baroda Electric Meters (supra) is not applicable to the facts of the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified in clause (a) of sub-section (1) of section 4 of the Act except the circumstance where the price is not the sole consideration for sale, the value of such goods shall be deemed to be the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee." 5. As against the above view of the Revenue, the case of the appellant is that the amounts collected by the assessee from their dealers toward freight represent "profit on transportation" and therefore, the decision of the Hon'ble Supreme Court in Baroda Electric Meters case (supra) would be squarely applicable. The learned Consultant for the Revenue has contested this proposition made by the Counsel by pointing out that the view taken by the apex court was relevant only for a period prior to 1-7-2000 when the concept of normal value (deemed price) of excisable goods prevailed. It has been argued that the ratio of the apex court's decision cannot be applied to a case for the period after 1-7-2000. This argument is based on a professed distinction between "normal value" and "transaction value". In this connection, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able value is corollary to exclusion of the actual cost of transportation from the assessable value. It has been argued that the excess freight collected by the appellant from their dealers is an additional consideration flowing directly or indirectly from the latter to the former and hence should be included in the assessable value of the goods under Rule 6. The term "additional consideration" appears to be referable to the additional amount referred to in the definition of "transaction value" given under Section 4(3)(d) of the Act. This definition indicates that, in addition to the amount charged as price of the excisable goods, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with, the sale, whether payable at the time of the sale or at any other time would also be includable in transaction value. We find that the excess freight collected by the appellant from their dealers was not an amount which the dealers were liable to pay to, or on behalf of the assessee, be reason of, or in connection with, the sale inasmuch as the relevant agreement of sale did not provide for such payment, the transportation of the goods having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, we come across the crucial finding which reads thus - "the excess amounts collected for, or in connection with, the transportation of the goods to the buyers' premises could be treated as part of the assessee's profits on transportation and hence, in terms of the apex court's decision, they should be excluded from the assessable value of the goods." It is crystal clear from the finding of the Tribunal that the amount was recognized as having been collected for, or in connection with, transportation of the goods from the factory gate to the buyers' premises. Obviously, no nexus was found between the said amount and sale of the goods to the buyer. Therefore, one can discern that the concept of transaction value was also borne in mind when the decision was rendered in Kothari Sugar and Chemicals case (supra). The plea of sub silentio is, therefore, not acceptable. For the same reason, we are not in a position to give any weightage to the reliance placed by the learned Consultant on Standard Alkali case (supra) and Trace Air Conditioning Systems (supra). In the circumstances, the suggestion made by the learned Consultant that the issue may be referred to a Larger Bench is not accep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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