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TMI Blog2006 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant provisions of Section 4 existing both prior to and after 1.7.2000 which read as under: Prior to 1.7.2000 Section 4. Valuation of excisable goods for purposes of charging of duty of excise Where under this act, the duty of excise is chargeable on any excisable goods with reference to value, such value, shall, subject to the other provisions of this section, be deemed to be- (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the lime and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale. With effect from 1.7.2000 Section 4 Valuation of excisable goods for purpose of charging of duty of excise. (1) Where under this Act the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall— (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscount it will have to meet the criteria provided under the provisions of new section 4(a) relating to transaction value which means that it should be the price actually paid or payable for the goods. In other words, it means that where no discount are availed by the customer, then the price actually paid or payable shall be the transaction value and will accordingly be the assessable value. Reliance in this regard was placed on the CEGAT decision in the case of Purolator India Ltd. vs. CCE 2005 (69) RLT .133 (CESTAT-Del)=2005 (182) ELT 385 (T) which in para 11 has held as follows: "11. Thus the value has undergone a complete change .The question to be asked for determination of the assessable value under new section 4 is what is the "transaction value" of the good that is "the price actually paid or payable for the goods when sold". Contrary to these provisions, under the old Section 4 the value was a deemed one, that is to say, the price at which goods are ordinarily sold in the course of wholesale trade. Now under New Section 4, one has not to look as to what is the price at which goods are ordinarily sold in the course of wholesale trade. The price actually paid or payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue, unlike the present context where the assessable value is the transaction value i.e. the price actually paid or payable and not otherwise. 9. SM V. Sridharan, the Ld. Advocate for the Respondents, however, submits that there is no distinction between the new provisions and the old provisions relating to Section 4, so far as such discount is concerned, and the decisions earlier tendered by the Bombay High Court duly approved by the Supreme Court still hold good. It was submitted that cash discount was allowed not on the premise that the gods were ordinarily sold at the same price or that the trade discount was allowed to all in the normal course of business, but on the ground that at the time of removal the price was less than what was payable after a specific period and the difference between the two was on account of delay in payment of price and not that it was a lesser price which was deemed price. It was submitted that this is evident from the CEGAT decision in the case of Bhartia Cutler Hammer Ltd vs. CCE 1988 (34) ELT 373 (T),where the contention of the Revenue that the higher price at which about 65% of the goods were sad was the price ordinarily charged and hence that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal decision in the case of ICI India Ltd. vs. CCE issued vide Order 2823/99 dated 4.11.1999 where it was clearly held that interest on receivable even when in built in the price of the goods, for delayed payment is an admissible deduction. It was submitted that similar views were taken in the case of High Court decision in Nelson Nikolas Gordha and therefore it is clearly established that the cash discount is on account of delayed payment and any extra price charge is on account of delay in payment and consequential interest accrued thereon and once it is not the revenue's case that the interest is so exorbitant that part of the price is being covered in the form of interest which is not so in the present case, the deduction cannot be denied even in those cases where the same is not availed of by the customers on account of late payment. 11. Reference was also invited to the WTO ruling on interest pertaining to Customs Valuation where also the concept of valuation is the transaction value. The Technical Committee on Customs Valuation Section Edition July 1997 has clarified that charges of interest under the financial arrangement entered into by the buyer and relating to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 9 also refers to admissibility of discount including year discounts which are not readily known at the time or removal and in that case, the field formation has been asked to make assessment provisionally and to allow such discounts. 13. A some was given in the budget circular issued vide F.No. 20/10/2000-TRU dated 12.5.2000 in which in para 2.2 it has been stated that stated that the definition of transaction value does not seem to be divergently wider in and from the interpretation of value under existing Section 4. 14. As regard is the revenue's contention that the transaction value is nothing but invoice price, and as long as the invoice price indicates the higher amount the duty has to be pan on the higher price, attention was invited to the decision of the Supreme Court in particular para 55 and 56 reported in 2004 (64) RLT 539 (SC) =2004 (172) ELT 289 (SC), which, while dealing with new Section 4 and the concept of transaction value as per explanation under new Section 4, stated that the machinery provision contained in Section 4 and that too the explanation contained therein by way of definition of transaction value can neither overrule the charging provision nor by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has to be considered as representing an element of interest on account of delay in payment and unless it is established that such difference in price is so vast that actually amounts to charging part of the price in the form of interest, the same cannot be rejected, and shall be the price applicable even in respect of those cases where cash discount is not availed of. We find that this view clearly emerges from the catena of decisions cited by the Ld Counsel for the respondents and in the Board's circular issued on the subject of transaction value. Even as per the WTO clarification dealing with the subject of transaction value, the interest element cannot be added in the transaction value as long as the rate of interest does not exceed the level for such transaction prevailing in the country where and at the lime when the finance was provided. It is not the revenue's case that in the instant case the price was exorbitant or beyond the normal level of interest rate charged in such business transaction or that there were stringent conditions put on for availing cash discount which make the availment of cash discount more illusory than real. We further note that the earlier decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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