2026-VIL-1388-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Assessable value of excisable goods – Sales commission paid to selling agents – Appellant manufacturer of Refractory Products engaged selling and commission agents both in foreign countries and in India for promoting exports and domestic sales – Appellant paid sales commission to foreign agents like commission agents based outside India and domestic agents for services rendered including procuring orders for export – Department issued SCN invoking extended period of limitation proposing to demand central excise duty on sales commission – Whether sales commission paid by appellant to selling agents is includable in assessable value as transaction value – HELD – It is not in dispute that buyers and sellers are unrelated parties and price is sole consideration of sale. Sales commission is not part of sale price paid or payable by buyer to seller. Transaction value is actual price paid or payable for goods when sold and includes any amount buyer is liable to pay to or on behalf of assessee by reasons of or in connection with sale – The sales commission sought to be included in transaction value is neither price paid or payable for goods when sold nor any amount buyer is liable to pay to or on behalf of assessee by reason of or in connection with sale. Sales commission is expense of appellant and there is no flow of any additional consideration or amount from buyer to appellant - Revenue has not come up with evidence to show that sales commission paid was recovered from buyer. In fact, sales commission paid by appellant is borne by appellant against sale price received from buyers. There is also no evidence on record showing appellants have received any additional consideration towards sale of goods - Sales commission is already factored into sale price on which appellant has paid duty correctly. Sales commission cannot be treated as part of transaction value or included in assessable value – The demand on account of sales commission is set aside and the appeal is allowed
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