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TMI Blog2024 (8) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... that for the goods covered under Serial No. 16, the minimum value addition shall be to the extent of 36%.This Notification grants Excise Duty exemption for this value addition of 36%. In terms of Para 3(1), if the value addition is more than 115% of this rate, the assessee can seek fixation of special rate. In this case, in order to be eligible for fixation of special rate, the value addition should be 41.4% (being 115% of 36%). Even after considering both VAT amount and discount as not part of the turnover, still the turnover comes to Rs. 52,29,41,710, whereas the appellant/Chartered Accountant has taken the turnover as Rs. 52,85,90,385/-. Based on their figure of Rs. 52,85,90,385/-, the appellant has arrived at the figure of value additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the matter remanded to the Adjudicating Authority to consider these aspects and arrive at the correct value addition. If it is found that the value addition is more than 41.4%, the request of the appellant towards fixation of special rate should be entertained. Appeal disposed off. - MR. R. MURALIDHAR, MEMBER (JUDICIAL) AND MR. RAJEEV TANDON, MEMBER (TECHNICAL) Dr. Samir Chkraborty, Sr. Advocate Mr. Abhijit Biswas, Advocate for the Appellant Mr. K. Chowdhury, Authorized Representative for the Respondent ORDER The appellant is manufacturer of Aerated Water falling under Chapter 22 of the Central Excise Tariff Act, 1985. They have their manufacturing unit at Rani, Guwahati. In terms of Notification No. 20/2007, in respect of such good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the buyer. Therefore, no abatement is available under Valuation Rules for such incentives and hence the same is required to be taken as part of the transactions value/turnover. He submits that the Adjudicating Authority has deducted the incentive value of Rs. 3,70,04,990/- while arriving at the total turnover, which is erroneous. He relies on the case law of Purolator India Ltd. vs. Commissioner of Central Excise, Delhi-III-2015 (323) ELT 227 (SC), in which it is held that unless the Trade Discounts are established under Agreements and the nature of the discount is known at or prior to the removal of the goods, no abatement can be claimed for such discounts given. He also relies on the case law of SRF Ltd. Vs. CEGAT, Chennai, 2021 (377) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He submits that these two amounts should be considered as part of the total sales turnover of the appellant and once this is done, it will get clarified that the value addition is to the extent of 91.57% which is much more than 36% given at serial No. 16, Column 4 of the Exemption Notification No. 20/2007-CE dated 25/4/2007. Therefore, he submits that the appeal may be allowed with a direction to the Adjudicating Authority to fix the special rate as requested by the appellant. 6. The Learned AR submits that it is on record that the appellant has passed on the incentives and discounts to the buyers of the goods and are accounted for in their Profit Loss Accounts. Therefore, such discounts and incentives will have to be removed from the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the end of the financial year (35871696-4411996) 31,459,700 Less: Value of the said goods available as inventory in the unit but not cleared, at the end of the financial year preceding that under consideration: (17159763-1575132) 15,584,631 Value Addition 252,661,376 Rate of Value Addition (As % of cost of sales) 91.57 9. On going through the Profit Loss Account submitted by the appellant, it is seen that the appellant is showing the turnover as 61,98,01,442/- and Excise Duty of 2,64,92,742/-. If these figures are considered and the disallowed turnovers on account of incentive/discount and VAT as held by the Adjudicating Authority are considered, the turnover would be as under:- Gross turnover : 61,98,01,442 Excise Duty : - 2,64,92,742 Net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 2(c) of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 [Valuation Rules, 2000] and Section 4 of the Central Excise Rules, 1944. The appellant relies on the explanation given at Section 4 wherein, it is clarified that sales tax and another taxes, if any, actually paid, shall be deemed to include the duty payable on such goods. On this count, the appellant also has cited certain case laws. 13. We find that the goods in question Aerated Water fall under Chapter 22. In terms of Notification No. 49/2008-CE (NT) dated 24/12/2008, the goods are subjected to Section 4A valuation. As per Section 4A Valuation, the Excise Duty is required to be paid based on the abatement given as a percentage of Retail Sale Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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