COMMISSIONER OF CENTRAL EXCISE, RAIGAD versus M/S. ISPAT METALLICS INDUSTRIES LTD. & ORS

COMMISSIONER OF CENTRAL EXCISE, RAIGAD versus M/S. ISPAT METALLICS INDUSTRIES LTD. & ORS

The transfer of iron ore pellets between the principal company and its sister concern under a joint procurement policy is not a sale but a transfer; for valuation purposes under the relevant Rules and Section 4(1)(a) of the Central Excise Act, the value shown in the supplier's invoice forming the basis of CENVAT credit is to be adopted; debit note charges for actual expenditure incurred post manufacture (such as bank charges, interest) are not includible in assessable value for duty.

Parties
Appellant: Commissioner of Central Excise, Raigad; Respondents: M/s. Ispat Metallics Industries Ltd. & Ors.
Jurisdiction
India
Judgment Date
06 May 2016
Procedural Posture
Civil Appeal / Supreme Court Judgment on Appeal From CESTAT
Outcome
Appeals dismissed
Legal Topics
CENVAT Credit, Valuation of Goods, Transfer Vs. Sale Distinction, Duty on Transferred Inputs
Central Excise Law Taxation CENVAT Credit Valuation of Goods Transfer Vs. Sale Distinction Duty on Transferred Inputs

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Parties

Commissioner of Central Excise, Raigad

Appellant

M/s. Ispat Metallics Industries Ltd. & Ors.

Respondents

Procedural Posture

Civil Appeal / Supreme Court Judgment on Appeal From CESTAT

Legal Issues

  1. 1 Whether transfer of iron ore pellets between sister companies under joint procurement policy constitutes sale or mere transfer for purpose of excise duty valuation
  2. 2 Whether amounts charged through debit notes (such as bank commission, interest, etc.) are includible in assessable value for duty

Ratio Decidendi

The transfer of iron ore pellets between the principal company and its sister concern under a joint procurement policy is not a sale but a transfer; for valuation purposes under the relevant Rules and Section 4(1)(a) of the Central Excise Act, the value shown in the supplier's invoice forming the basis of CENVAT credit is to be adopted; debit note charges for actual expenditure incurred post manufacture (such as bank charges, interest) are not includible in assessable value for duty.

Court Disposition

Appeals dismissed

Orders

  • No infirmity found with Tribunal's judgment
  • Tribunal justified in finding that present transaction is a transfer and not a sale