2025-VIL-1224-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Valuation of excisable goods, Additional consideration in the form of benefits of duty-free imports and drawback - Department initiated proceedings against the appellants, alleging that the value paid by the customers to the appellants in the form of benefits of duty-free imports and drawback on deemed exports, as a result of the advance authorization/advance license transferred in favor of the appellants, should be treated as 'additional consideration' for the sales made by the appellants to their customers - Whether the value paid by the customers to the appellants in the form of benefits of duty-free imports and drawback on deemed exports, as a result of advance authorization/advance license, transferred in favor of the appellants by issue of 'letter of invalidation' and 'Advance Release Order (ARO)', can be treated as 'additional consideration' for the sales made by the appellants to their customers – HELD - The transfer of the benefits of advance license through invalidation letters in favor of the seller, enabling the seller of the goods to effect duty-free import of raw materials and bringing down the cost of production, is a consideration, the monetary value of which has to be considered under the provisions of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - The Department has provided specific cases of sale transactions to show that the per metric tonne sale price of finished goods to the buyers who did not supply invalidation letters/AROs were higher than the prices charged for those buyers who had supplied such documents - Further, the statement given by the appellants' representative had also admitted that the local DTA sale prices were higher than the transaction value of suppliers who made supplies under deemed export. Therefore, there was an additional consideration involved in such transactions and the impugned order in confirmation of the adjudged demands and consequent imposition of penalties on the appellants is legally sustainable - the appeal filed by assessee is dismissed
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