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TMI Blog2021 (3) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. are examined to ascertain if there was any extra commercial consideration . The Board has also accepted the fact that the Apex Court in its judgement has observed that selling of final products below the manufacturing cost was intended to penetrate the market which also constitutes extra commercial consideration in the hands of the manufacturer. The appellant s case is squarely covered by the ratio laid down by the Apex Court in the case of COLLECTOR OF C. EX., NEW DELHI VERSUS GURU NANAK REFRIGERATION CORPN. [ 2003 (3) TMI 100 - SUPREME COURT] wherein also, in identical facts and circumstances, the Department proposed to reject the transaction value for the reason that cost of manufacture was found to be higher than the price at which goods were eventually sold. The Apex Court taking note of the fact that when there was no additional consideration and the goods were cleared to independent buyers, upheld the valuation adopted by the assessee under Section 4(1)(a). There are no positive evidence to show that there is any fraud or willful suppression on the part of the appellant and hence, the demand is clearly barred by limitation - appeal allowed - decided in favor of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been sold at the time and place of removal, the price at which such goods have been sold is the transaction value for the purpose of assessment of excisable goods cleared by the appellant and merely because the cost of production is higher than the price at which goods have been sold cannot be made the reason to disregard the transaction value adopted by the appellant. 4.1 The learned Advocate also relied on the CBEC Circular No.979/3/2014-CX dated 15.01.2014, issued after the Apex Court s decision in Fiat India (Supra), wherein it has been clarified that merely because the goods are sold below the manufacturing cost cannot be made the whole basis for rejecting the transaction value. He also submitted that the goods have been sold as per the prevailing market prices and the sale prices even though were kept lower than the manufacturing cost, but not with the intent to penetrate the market. He also submitted that Board in aforesaid circular has clarified that the various aspects which have to be considered by Revenue such as percentage of loss at which the sale has taken place, the period for which loss making price has prevailed, reason for which sale at such loss making price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellant assessee has no merits and the same is fit to be rejected. 6. Heard both sides through video conferencing and perused the appeal records in great detail. Written submissions filed by the learned Advocate have also been considered. 7. In the instant case, we find that the Department has rejected the transaction value under Section 4(1)(a) of the Act merely on the ground that the cost of manufacture is higher than the price at which goods have been cleared by the appellant. There is no dispute that the goods have been sold to the unrelated buyers and there is no flow back of additional consideration, as also have been specifically admitted by the learned Pr. Commissioner in para 27 and para 30 of the impugned order. 7.1 We have perused the clarifications issued by the CBEC vide Circular dated 15.01.2014 (Supra) issued aftermath the decision in the case of Fiat India (Supra), which is reproduced below:- The 2. first issue is whether the declared transaction value can be rejected in all cases where the transaction value is lower than the manufacturing cost and profit. The Hon ble Supreme Court has not ruled that transaction value can be rejected in all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequent Circular No. 983/7/2014-CX., dated 10-7-2014 has also clarified as below:- The matter has been examined in the light of the 4. facts in the case of M/s. Fiat India (P) Ltd. vis- -vis the facts in the case of fertilizers. The facts in the case of M/s. Fiat India (P) Ltd. were that the company had declared an assessable value for Uno model cars at a price which was substantially lower than the cost of manufacture, and the company continued to sell the cars at a loss making price for nearly five years. The company admitted that the purpose of doing so was to penetrate the market and to compete with the other manufacturers of similar cars. It was under these circumstances that the Hon ble Supreme Court held that such sales could not be regarded as sales in the ordinary course of sale or trade, nor could the declared value be accepted as the normal price for sale of cars. As the main reason for selling cars at a lower price than the manufacturing cost and profit was to penetrate the market, the apex court held that this would constitute extra-commercial consideration and not the sole consideration. Since the price was not the sole consideration for sale of cars, the Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of wholesale price, so why the differential duty on the basis of costs of production of the goods should not be recovered from it. The reasoning in the show cause notice was adopted by the Assistant Collector in confirming demand as well as by the Collector in rejecting the appeal. But the Tribunal set aside the order of the Collector and allowed the appeal by the order impugned in the appeal before us by the Revenue. 5.A perusal of the show cause notice shows that it does not contain an allegation that the wholesale price to the buyers was for consideration other than the one at which it purported to be sold or that it was not at arms length. There is also no allegation that there was any flowback of the money from the buyer to the assessee. In the absence of these factors it cannot be contended that normal price was not ascertainable. There is no valid reason to doubt the genuineness of the sale price. It can therefore safely be concluded that the goods were sold at the normal price within the meaning of Section 4(1)(a) of the Act. In our view, the Tribunal is right in accepting the wholesale price as the correct price following the judgment of the Court in Union of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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