The Customs, Excise & Service Tax Appellate Tribunal, Allahabad, ruled that the excise duty demand can’t be based on director’s statement in absence of corroborative evidence.
The bench noted that the definition of “transaction value” after amendment, means the price actually paid or payable for the goods, when sold, and include 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.
The bench found that the Supreme Court in the case of CCE, Pondicherry vs. Acer India Ltd. wherein it has been held that only because the expression, “by reason of sale, or in connection with the sale” has been used in the definition of “transaction value”, the same by itself would not take away the rigors of charging section.
The bench held that the demand of duty in respect of third party inspection charges cannot be sustained.
Facts
The Appellant was engaged in the manufacture of PVC Pipes and their fittings classifiable under Chapter Heading Nos.39172390 and 39174000 of Central Excise Tariff Act, 1985.
On 22.06.2016 Officers of DGCEI, Kanpur conducted search at the business premises of the Appellant’s company, residential premises of Director and at some other places.
The search continued till 23.06.2016, on which date, an amount of Rs.50 lakhs was deposited by the Appellant vide TR-6 Challans. During the course of search, some loose slips were recovered from the residence of the Director which could not be explained by him in his statement. Show Cause Notice was issued by DGCEI, Kanpur Regional Unit, Kanpur.
After service of SCN, the Appellant within a period of one month from the issuance of SCN deposited an amount of Rs.43,026/-. The Appellant also deposited interest amounting to Rs.7,300/- and 15% penalty of Rs.6,454/-.
Conclusion
The tribunal found that the demand in the case has been confirmed merely on the basis of a statement of Director without any corroborative /cogent material brought on records.
The bench allowed the appeals.
Case Details
Case Name: M/s Mahavir Polyplast Pvt. Ltd. v/s Commissioner of Central Excise, Agra
Citation: Excise Appeal No.70204 of 2019
Tribunal: CESTAT Allahabad
Coram: Mr. P.K. Choudhary, Member (Judicial) and Mr. Sanjiv Srivastava, Member (Technical)
