Indian Telephone Industries Vs. Cce - Court Judgment

Excerpt:
1. the appellant is a psu unit. they have challenged the correctness of the order-in-appeal no. 316/91 dated 30.9.1991. the appellants had raised 15 bills on 20.6.1990 for a total amount of rs. 10,47,306/- towards bonus for supply of ilt and dtas exchanged to various stations of telecommunication department during 1989-90. this claim of bonus was as a result of expeditious manufacture and execution of orders ahead of time. the department initiated proceedings on the ground that this bonus received is required to be added in the assessable value.2. the appellants have resisted the same that the bonus has been claimed after the goods were cleared and the duty was paid and that it does not form part of the assessable value. they have relied on the judgment rendered by the tribunal on the very issue in the case of jalan refractories pvt. ltd. v. cce, jaipur 2000 (41) rlt 3] wherein it has been held in para 4 that bonus does not form part of the assessable value as they are post sale considerations and the goods had been cleared at the time of removal at the agreed price. it has been noted that subsequent dealing between the parties on account of performance or otherwise of the goods is not of concern with regard to sale price of the goods at the time of removal and is not required to be added in the assessable value. the tribunal has applied the ratio of the larger bench judgment rendered in the case of shrichakra tyres ltd. v. cce, madras 1999 (32) rlt l(cegat) : 1999 (83) ecr 690 (t) in the matter.the appellants also relied on the judgment of the tribunal rendered in the case of bhartia cutler hammer ltd. v. cce, new delhi wherein also liquidated damages collected for breach of contract was held to be not part of the assessable value. it is the submission of the appellant that bonus received on account of performance and expeditious manufacture or liquidated damages received for non-performance are not part of the assessable value and cannot be added to the assessable value.3. we have heard both sides in the matter and on a careful consideration we find that the issue is no longer resintegra and the matter has been decided by the tribunal in the judgements noted supra.the bonus received was as a result of executing orders ahead of time and received after the goods were cleared on demand of duty. therefore, in terms of the judgment rendered in the case of jalan refractories pvt. ltd. and that of bhartia cutler hammer ltd., the bonus received for better performance and expeditious execution of orders is not liable to be added to the assessable value. respectfully following the ratio of the judgements cited above, the impugned order is set aside and appeal allowed.(operative portion of the order was dictated in open court on conclusion of hearing.)

Judgment:
1. The appellant is a PSU Unit. They have challenged the correctness of the Order-in-Appeal No. 316/91 dated 30.9.1991. The appellants had raised 15 bills on 20.6.1990 for a total amount of Rs. 10,47,306/- towards bonus for supply of ILT and DTAs exchanged to various stations of Telecommunication Department during 1989-90. This claim of bonus was as a result of expeditious manufacture and execution of orders ahead of time. The Department initiated proceedings on the ground that this bonus received is required to be added in the assessable value.

2. The appellants have resisted the same that the bonus has been claimed after the goods were cleared and the duty was paid and that it does not form part of the assessable value. They have relied on the judgment rendered by the Tribunal on the very issue in the case of Jalan Refractories Pvt. Ltd. v. CCE, Jaipur 2000 (41) RLT 3] wherein it has been held in Para 4 that bonus does not form part of the assessable value as they are post sale considerations and the goods had been cleared at the time of removal at the agreed price. It has been noted that subsequent dealing between the parties on account of performance or otherwise of the goods is not of concern with regard to sale price of the goods at the time of removal and is not required to be added in the assessable value. The Tribunal has applied the ratio of the Larger Bench judgment rendered in the case of Shrichakra Tyres Ltd. v. CCE, Madras 1999 (32) RLT l(CEGAT) : 1999 (83) ECR 690 (T) in the matter.

The appellants also relied on the judgment of the Tribunal rendered in the case of Bhartia Cutler Hammer Ltd. v. CCE, New Delhi wherein also liquidated damages collected for breach of contract was held to be not part of the assessable value. It is the submission of the appellant that bonus received on account of performance and expeditious manufacture or liquidated damages received for non-performance are not part of the assessable value and cannot be added to the assessable value.

3. We have heard both sides in the matter and on a careful consideration we find that the issue is no longer resintegra and the matter has been decided by the Tribunal in the judgements noted supra.

The bonus received was as a result of executing orders ahead of time and received after the goods were cleared on demand of duty. Therefore, in terms of the judgment rendered in the case of Jalan Refractories Pvt. Ltd. and that of Bhartia Cutler Hammer Ltd., the bonus received for better performance and expeditious execution of orders is not liable to be added to the assessable value. Respectfully following the ratio of the judgements cited above, the impugned order is set aside and appeal allowed.

(Operative portion of the Order was dictated in open court on conclusion of hearing.)