At, Supreme Court of India
By, THE HONOURABLE MR. JUSTICE S.A. BOBDE
By, THE HONOURABLE MR. JUSTICE DEEPAK GUPTA & THE HONOURABLE MR. JUSTICE VINEET SARAN
For the Appellant: Parag P. Tripathi, ASG, Binu Tamta, Shadam Farasat, Rajiv Nanda, B. Krishna Prasad, Advocates. For the Respondent: Tarun Gulati, U.A. Rana, Devina Sehgal, M/s. Gagrat & Co., Advocates.
Judgment Text
S.A. Bobde, J.
The Revenue-Appellant has come in appeal against the order of the Central Excise and Service Tax Appellant Tribunal (for short "CESTAT") dated 04.04.2007. The Respondent manufactured goods falling under Chapter 72 of The Central Excise Tariff Act, 1985. The Respondent manufactured Pig Iron and HR Coil Sheets. While selling the goods they raised invoices on the price of goods plus 'Dharmada' a charitable donation from customers. According to the Respondent, the Dharmada was meant for charity and was accordingly credited to charity.
2. However, show cause notice dated 19.03.2004 was issued by the office of the Deputy Commissioner of Central Excise and Customs, Bellary under Section 4 of the Act calling upon the Respondent to show cause as to why penalty under Rule 25 of Central Excise Rules, 2002 and interest under Section 11AB of the Central Excise Act, 1944 should not be levied. After hearing the Respondent, the Deputy Commissioner vide order dated 10.09.2004 held that the Dharmada is to be added to the assessable value for the payment of central excise duty.
3. Thereafter, in an appeal filed by the Respondent, the Commissioner (Appeals), confirmed the decision of the Deputy Commissioner and rejected the appeal and held that Dharmada should be added to the assessable value. Therefore, the goods were liable to be assessed on the basis of their price plus Dharmada.
The CESTAT in an appeal filed by the Respondent, by judgement dated 04.04.2007, allowed the appeal and set aside the order passed by Commissioner (Appeals) dated 29.03.2005. The CESTAT purported to follow its judgment in the case of Mohan and Co., Madras vs. CCE Madras, which was affirmed by the Supreme Court in appeal, whereby this Court held that Dharmada was not liable to be added in the assessable value.
4. Thereafter, in Civil Appeal No. 531 of 2008 before this Court, it was contended by the Appellant before a Division Bench of this Court, that the decision in Collector vs. Panchmukhi Engineering Works, 2003 (158) ELT550(SC) was to be followed. Thus, contending that Dharmada should be a part of the assessable value.
5. The present case has been tagged with the case of M/s D.J. Malpani vs. Commissioner of Central Excise, Nashik which has been referred to this Bench vide order dated 29.07.2015. We have held that the amount of
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Dharmada cannot be included in the transaction value for the purposes of assessments. 6. In view of the judgment in the case of Civil Appeal No. 5282 of 2005, M/s D.J. Malpani vs. Commissioner of Central Excise, Nashik, we hereby dismiss the present appeal.
