9911796707
TMI Blog2013 (12) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... er supply units and other goods are manufactured and supplied to the Government of India undertakings, under the Ministry of Defence, like Bharat Electronics Ltd., Hindustan Aeronautics Ltd., etc. The above organizations place purchase orders for the supply of the power supply units, setting out the terms and conditions. The PSUs manufactured are tested from all angles, like quality control, Electronic Stress Screening (ESS) tests etc. The PSUs are used by the Defence establishments in their various projects. The PSUs manufactured by the appellant undergo ESS tests in the manufacturing unit of the appellants factory before they are cleared. During the audit of the appellant's records in July 2007, it was pointed out by the audit party that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 4. He also submits that there is no dispute that the amount was paid to get these tests done for the third parties and whatever was received for getting test done was paid to the third parties and therefore, in reality what was received by the appellant was only a reimbursement of the cost incurred by them and therefore not includable in the assessable value. He also submits that in this case the audit objection was raised in 2007 and a show-cause notice was issued in March 2008 and extended period has been invoked to demand duty from April 2005 to June 2007 and whole period is beyond the normal period of limitation. He also submits that when a demand is not sustainable without invoking suppression, the adjustment of the amount alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspection would be includable in the assessable value. 4. We have considered the submissions made by both the sides. The issue involved is within a narrow compass and is as to whether the cost of third party test got done at the instance of customer is to be included in the value or not. 5. According to Explanation (1) of Section 4 of the Central Excise Act, 1944 for the removal of doubts, it is hereby declared that the price-cum-duty of excisable goods sold by the assessee shall be the price actually paid to him for the goods sold and the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods. 6. In this case, a few sample purchase ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction value' means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, 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, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. From the above also, it is quite clear that the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of sale and amount received was in the nature of additional consideration from the buyer to the seller and therefore includable in the assessable value. It is not the case of the appellant that the fact of ESS test being done on the items sold by them was intimated to the department or clarification was sought by them from the department or the value was shown separately in the returns filed with the department, etc. No such defence has been placed before us. No evidence has been produced to show that the appellants entertained a bona fide belief and there was valid ground for entertaining such a bona fide belief. Even a layman's reading of provision of Section 4 would show that the cost of ESS test whether it is done by third party or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to 1.7.2000. For the subsequent period, it was held that it would be includable and it would depend upon the agreement between the buyer and the seller. We have already taken a view based on the agreement in this case. Therefore, this decision is also not applicable to the facts of this case. 11. Another submission was made that the demand was beyond the normal period of limitation and therefore was not payable and in that situation the refund should have been granted. It was also urged that this would put honest assessee in a disadvantage position since an honest assessee who makes the payment for the period beyond normal period of limitation, the refund will not be granted subsequently whereas if an assessee contests, the demand may n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
