2026-VIL-246-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Determination of ‘Transaction value’ - Deduction from transaction value under Section 4(3)(d) of the Central Excise Act, 1944 – Appellant was engaged in mining and selling of coal. Central excise duty was levied on the sale of coal from March 2011 - Whether certain amounts received by the appellant, such as royalty, stowing excise duty, forest transit fees, Madhya Pradesh Rural Infrastructure and Road Tax, entry tax, terminal tax, and CG Development and Environment Cess, are eligible for deduction from the "transaction value" under Section 4(3)(d) of the Central Excise Act, 1944 – HELD – The law, as it stands today, the Royalty is not in the nature of a tax, and hence the amount received towards royalty is includible in the transaction value. Since the Royalty is not in the nature of tax and it would be includible in the transaction value. However, the demand for the extended period of limitation is set aside as the appellant had a bonafide belief that royalty was in the nature of a tax based on the earlier Supreme Court judgment in India Cement - Stowing Excise Duty, being a duty of excise levied under the Coal Mines (Conservation and Development) Act, 1974, is in the nature of "other taxes" and hence deductible from the transaction value – The Forest Transit Fees, Madhya Pradesh Rural Infrastructure and Road Tax, Entry Tax, Terminal Tax, and CG Development and Environment Cess are in the nature of "other taxes" and hence deductible from the transaction value in terms of section 4(3)(d) of the Central Excise Act - The demand of central excise duty on captive consumption of coal is not sustainable. The extended period of limitation under Section 11A of the Central Excise Act could not have been invoked as there was no willful suppression of facts by the appellant with the intent to evade payment of duty - The imposition of penalty under Section 11AC and the demand of interest are also set aside. The appeals are partly allowed
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