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TMI Blog2013 (9) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... the cause for regular hearing. Stay Application – Waiver of Pre-deposit - Assesse had not been able to make out a prima-facie case in their favor – 40 lakhs were ordered to be submitted as pre-deposit – relying upon RAVI GUPTA Versus COMMISSIONER OF SALES TAX, DELHI [2009 (3) TMI 200 - SUPREME COURT OF INDIA - Assesse’s submission was that calling for 10% of the duty demand towards deposit shall serve the purpose of exercise of the right of appeal - But Revenue shall be prejudiced, if such meagre amount when our dissatisfaction expressed above come out from the reading of record itself including show cause notice – Stay Granted partly. Member (Technical) was also of the same opinion but the reasoning derived by them was different – ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 6.2 of the reported decision in 2007 (208) E.L.T. 181 such a compensation shall not be liable to tax without having any nature and character of sale price. 4. Revenue supports the adjudication on the ground that adjudication order having been passed to bring the escaped transaction value to tax ambit, there should be direction for pre-deposit of entire demand. 5. Heard both sides and perused the record. 6. We have perused Article 9 with Schedule 7 of the agreement in question. That transpires that the consideration is determinant of sale price determined on the basis of certain contractual terms agreed by the parties. For deviation to fulfil contractual terms, the compensation attributable to that influences price. Prima facie it a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view Revenue shall be prejudiced, if we agree to such meagre amount when our dissatisfaction expressed above come out from the reading of record itself including show cause notice. Therefore, we direct the appellant to make deposit of Rs. 40,00,000/- (forty Lakhs) within 4 weeks from today and make compliance on 18th January, 2013. 10. We are conscious that we have not passed the above order unmindfully. We have looked into undue hardship of the appellant as well as interest of Revenue and tried to strike a balance between the two being guided by para 7 of the Apex Court judgment in the case of Assistant Collector v. Dunlop India Ltd. reported in 1985 (19) E.L.T. 22 (S.C.) and also Benara Valves Ltd. v. Commissioner reported in 2008 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the difference between the sales turnover to ensure the minimum ROE and the actual sales turnover, is required to be paid by M/s. Eicher to the appellant as operational compensation which in effect increases the per unit sales price. In case the ROE for the Appellant is more than the minimum prescribed in the agreements, subject to certain conditions being fulfilled, a part of it is shared by the Appellant with M/s. Eicher which has the effect of reducing the per unit price. The point of dispute is as to whether in this factual background the operational compensation would be part of the assessable value of the goods being sold by the appellant to M/s. Eicher Motors or it is to be treated as liquidated damage and not includible in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the provisions of schedule 7 thereof. Subject to Caparo achieving Capaso controlled factors, it is expressly agreed between the parties that the price to be paid by Eicher to Caparo in respect of supply of components shall be at least to the extent that it ensures a certain minimum return on equity to caparo. Since operational compensation being recovered by the appellant from M/s. Eicher is to ensure the minimum ROE to Appellant, the above mentioned clause 9.1 of the agreement leaves no scope for doubt that operational compensation is part of the price of the goods and is something totally different from liquidated damage. In fact in view of the above clause, it would be totally mis-leading for the Appellant to claim that operat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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