Case: Commissioner Of Central Excise,Pune Vs. Hindustan National Glass &amp; Inds. Ltd

dealing with the transaction between the appellant therein and M/s. Ponds (I) Ltd., who was a whole-sale buyer of the appellants goods, had accepted the view of the tribunal and expressed thus: “On the facts on record, therefore, it must be held that the Tribunal was perfectly justified in taking the view that charging a separate price for the metal containers supplied to M/s Ponds (I) Limited could not stand justified under Section 4(1)(a) proviso and, therefore, to that separate price charged from the Ponds (I) Limited, the extent of benefit obtained by the assessee on interest-free loan was required to be reloaded by hiking the price charged from M/s. Ponds (I) Limited to that extent. Contention 2 also, therefore, fails and is rejected.” 10. In Hero Honda Motors Ltd. (supra), the question that arose for determination is whether receipt of advance and the income accruing thereon, had gone towards the depreciation of the sale price. In that context, the Court opined that there is conspectus of decisions which clearly establish that inclusion of notional interest in the assessable value or wholesale price will depend upon the facts of each case. The three-Judge Bench adverted to the facts of the case, the agreement existing between the parties and the lower price at which the respondent-assessee therein had sold the motor-cycles and after analysing the factual matrix opined as follows: “For the above reasons, we hold that the tribunal has disposed of the appeal before it in a most perfunctory manner without going into any figures at all but by merely on the statement made by counsel and on the basis of material which appears to have been produced first time before the tribunal. We, therefore, set aside the order of the tribunal and remand the matter back to the tribunal. The tribunal will consider in detail, if necessary, by taking the help of a Cost Accountant and after looking into the accounts of the respondent whether or not the advances or any part thereof have been used in the working capital and whether or not the advances received by the respondent and/or the interest earned thereon have been used in the working capital and/or whether it has the effect of reducing the price of the motorcycle. The tribunal to so decide on the material which was placed before the Commissioner and not to allow any additional documents/materials to be filed before it. None of our observations made herein shall bind the tribunal to which this case is remitted.” 11. In the case at hand, the Member (Judicial) has remitted the matter to the competent authority to deal with it afresh in the light of the decision rendered in Hero Honda Motors Ltd. (supra). 12. Mr. Aarohi Bhalla, learned counsel for the respondent-assessee would submit that when no evidence was adduced by the revenue at any point of time and the law is settled that the onus is on the revenue to establish that there has been depression of assessable value, the majority view of the tribunal cannot be found fault with. 13. Mr. Yashank Adhyaru, learned senior counsel appearing for the appellant-revenue would submit that the documents were produced before the adjudicating authority as well as the tribunal to show the nature of advance and the manner of transaction from which it is demonstrable that there has been depression of the assessable value.14. On a perusal of the order passed by the Commissioner, it is seen that observations have been made on certain aspects and inferences have been drawn. It cannot be said that no material was produced by the revenue. The concerned Commissioner has taken note of the statement made by the Manager (Sales) of the assessee-Company. An aspect raised relates to percentage of total sales made to two companies, but the core issue is whether there was a depression of the sale price on account of receipt of advance. In the case of Metal Box India Ltd. (supra), the facts were extremely clear as there was an agreement that M/s. Ponds (I) Ltd. had given 50% advance with a stipulation that it would purchase 90% of the manufactured goods. It was a case where a separate price was charged. In the case of Hero Honda Motors Ltd. (supra), the facts, as we perceive, were not clear and, therefore, there was a remit. Be it noted, sale price agreed between two competing parties may get depressed, when substantial and huge advances are periodically extended and given with the objective and purpose that the sale price paid or charged would be lowered, to set off the consideration paid by grant of advances. There should be a connect and link between the two i.e. the money advanced it should be established was a consideration paid which could form the basis for depression of sale price. Evidence and material to establish the said factual matrix has to be uncovered and brought on record to connect and link the sale price paid on paper and the “other” consideration, not gratis, but by way of interest free advances.15. In our considered opinion, in the present case, there has to be application of mind by the tribunal regard being had to the amount of money paid by purchasers, namely, M/s. Coca Cola India and M/s. Pepsico India Holdings Pvt. Ltd. and what is the effect of the sales made to the two companies in percentile terms, whether this had the effect of depressing the sale price. The onus would be on the revenue. That being the thrust of the matter, liberty is granted to the revenue to produce the documents in this regard to discharge the onus. As we are remitting the matter, we may note one submission of the respondent-assessee. It is urged by the learned counsel that when the entire activities were within the knowledge of the excise authorities, penalty is not leviable. Needless to emphasize, the tribunal shall advert to the said submission, if required, in the ultimate eventuate, in proper perspective.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]price agreed between two competing parties may get depressed, when substantial and huge advances are periodically extended and given with the objective and purpose that the sale price paid or charged would be lowered, to set off the consideration paid by grant of advances. There should be a connect and link between the two i.e. the money advanced it should be established was a consideration paid which could form the basis for depression of sale price. Evidence and material to establish the said factual matrix has to be uncovered and brought on record to connect and link the sale price paid on paper and theconsideration, not gratis, but by way of interest free advances.15. In our considered opinion, in the present case, there has to be application of mind by the tribunal regard being had to the amount of money paid by purchasers, namely, M/s. Coca Cola India and M/s. Pepsico India Holdings Pvt. Ltd. and what is the effect of the sales made to the two companies in percentile terms, whether this had the effect of depressing the sale price. The onus would be on the revenue. That being the thrust of the matter, liberty is granted to the revenue to produce the documents in this regard to discharge the onus. As we are remitting the matter, we may note one submission of the respondent-assessee. It is urged by the learned counsel that when the entire activities were within the knowledge of the excise authorities, penalty is not leviable. Needless to emphasize, the tribunal shall advert to the said submission, if required, in the ultimate eventuate, in proper perspective.