Skoda Auto Volkswagen India Private ... vs Commissioner Of Central Excise And ... on 14 November, 2022

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Custom, Excise & Service Tax Tribunal

Skoda Auto Volkswagen India Private ... vs Commissioner Of Central Excise And ... on 14 November, 2022

      CUSTOMS, EXCISE & SERVICE TAX APPELLATE
                 TRIBUNAL, MUMBAI
                         REGIONAL BENCH

                Excise Appeal No. 87501 of 2017

(Arising out of Order-in-Original No. 78/CEX/COMMR/2017 dated 31.03.2017
passed by Commissioner of CGST & Service Tax, Aurangabad)

M/s. Skoda Auto India Pvt. Ltd.                           Appellant
A-1/1, Five Star Industrial Estate,
MIDC Shendra, Aurangabad 431 201.

Vs.
Commissioner of C.E. & S.T., Aurangabad                 Respondent

N-5, Town Centre, CIDCO, Aurangabad 431 030.

WITH Excise Appeal No. 86049 of 2018 (Arising out of Order-in-Original No. 86/CEX/COMMR/2017 dated 30.11.2017 passed by Commissioner of CGST & Service Tax, Aurangabad) M/s. Skoda Auto India Pvt. Ltd. Appellant A-1/1, Five Star Industrial Estate, MIDC Shendra, Aurangabad 431 201.

Vs. Commissioner of C.E. & S.T., Aurangabad Respondent N-5, Town Centre, CIDCO, Aurangabad 431 030.

AND Excise Appeal No. 85181 of 2019 (Arising out of Order-in-Original No. 15/CEX/COMMR/2018-19 dated 24.10.2018 passed by Commissioner of CGST & Service Tax, Aurangabad) M/s. Skoda Auto India Pvt. Ltd. Appellant A-1/1, Five Star Industrial Estate, MIDC Shendra, Aurangabad 431 201.

Vs. Commissioner of C.E. & S.T., Aurangabad Respondent N-5, Town Centre, CIDCO, Aurangabad 431 030.

Appearance:

Shri V. Sridharan, Senior Advocate, with Shri Rajesh Ostwal and Ms. Payal Nahar, Advocates, for the Appellant Shri S.K. Mathur, Special Counsel, for the Respondent CORAM:

HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Date of Hearing: 14.11.2022 Date of Decision: 14.11.2022 2 E/87501/2017,86049/2018,85181/2019 FINAL ORDER NO. A/86208-86210/2022 PER: SANJIV SRIVASTAVA The appeals are on identical issues involving different periods as mentioned in table below have been filed against the Appeal Order in Original No/ date SCN Date Period Amount No. E/87501/ 78/CEX/Commr/2017 dtd 29.04.2016 2010-11 to 212,81,76,841/- 17 31.03.2017 2014-15 E/86049/ 86/CEX/Commr/2017 dtd 03.05.2017 2015-16 36,12,67,088/- 18 30.11.2017 E/85181/ 15/CEX/Commr/2018-19 13.04.2018 2016-17 to 19,99,47,306/- 19 dtd 24.10.2018 2017-18 (upto June 2017) 1.2 By the impugned orders following has been held:

Order in Original No 78/CEX/Commr/2017 dtd 31.03.2017 "ORDER

(i) I confirm the demand of Central Excise duty amounting to Rs 2,12,81,76,841/-(including BED 2,04,32,78,615/- + NCCD Rs. 2,04,32,786/- +Automobile Cess Rs. 25,54,098/- + Edu.

Cess Rs. 4,12,74,228/- + SHE Cess 2,06,37,114/-) under proviso to Section 11A(4) of Central Excise Act, 1944;

(ii) I also confirm the Interest at appropriate rate on the amount so confirmed at sr. no, (i), and order its recovery from the assessee Section 11AB (existing Section 11AA) of Central Excise Act, 1944; and

(iii) I impose penalty of Rs. 2,12,81,76,841/-under Section 11AC of Central Excise Act, 1944."

Order in Original No 86/CEX/Commr/2017 dtd 30.11.2017 "ORDER

(i) I confirm the demand of Central Excise duty amounting to Rs 36,12,67,088/-(including BED 30,85,55,520/- + NCCD Rs. 1,02,85,184/- +Automobile Cess Rs. 12,85,648/- + 3 E/87501/2017,86049/2018,85181/2019 Infrastructure Cess Rs. 4,11,40,736/-) under proviso to Section 11A(4) of Central Excise Act, 1944;

(ii) I also confirm the Interest at appropriate rate on the amount so confirmed at sr. no, (i), and order its recovery from the assessee Section 11AA) of Central Excise Act, 1944; and

(iii) I impose penalty of Rs. 36,12,67,088/-under Rule 25 and Rule 27 of Central Excise Rules, 2002."

Order in Original No 15/CEX/Commr/2018-19 dtd 24.10.2018 "ORDER

(i) I confirm the demand of Central Excise duty amounting to Rs 19,99,47,306/-(including BED 17,07,73,500/- + NCCD Rs. 56,92,450/- +Automobile Cess Rs. 7,11,556/- + Infrastructure Cess Rs. 2,27,69,800/- + SHE Cess 2,06,37,114/-) under proviso to Section 11A(4) of Central Excise Act, 1944;

(iii) I impose penalty of Rs. 19,99,47,306/-under Rule 25 and Rule 27 of Central Excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944."

2.1 Appellant is engaged in the manufacture of excisable goods Motor Cars falling under Chapter 87 of the Central Excise Tariff Act, 1985 and they are availing Cenvat credit in respect of input, input services and capital goods.

2.2 Appellant is a subsidiary Company of M/s Skoda a.s. They are engaged in manufacture of motor cars in the brand name of 'SKODA' belonging to M/s SKODA a.s. Both the Companies are related and interconnected. It appears that both the related companies are in business intrinsically as the appellant purchases the imported raw material, spare parts etc., from M/s SKODA a.s. which is providing financial assistance to the them for the reasons as stated by M/s SAIPL a.s. to improve their operating margins and to ensure its sustainability and long terms interest. Both the corporate companies are safeguarding the 4 E/87501/2017,86049/2018,85181/2019 interest of each other and making efforts to increase their profit margin in corporate veil.

2.3 Appellant have received the financial assistance from their parent from their parent company Skoda Auto a.s. as is tabulated below:

Sr.No. Period Financial Assistance Received in Rs 1 2010-11 158,74,68,000/-

2 2011-12 200,45,81,500/-

3 2012-13 105,19,80,000/-

4 2013-14 171,64,68,996/-

5 2014-15 117,94,11,170/-

                  Total                           753,99,09,666/-

         7        2015-16                             102,85,18,400/-

         8        2016-17                              56,92,44,999/-

2.4      Rule 6 of the Central Excise (Valuation) Rules, 2000,

stipulates that in cases where price is not the sole consideration, the assessable value shall be based on the aggregate of the price and money value of the additional consideration flowing directly or indirectly to the noticee. The financial assistance received from M/s Skoda a.s. which is additional consideration in the interest of the Brand owned by them and in the business interest of appellant should have been included in the assessable value of the motor cars cleared by the appellant 2.5 On the basis of the investigations made revenue was of the view that in guise of their corporate veil appellant had suppressed the value of the motor cars cleared by them with intent to avoid the payment of Central Excise Duty on the amount of financial assistance.

2.6 Therefore, Show Cause Notice dated 29.04.2016 was issued to the appellant asking them to show cause as to why:

(i) Central Excise duty amounting to 2,12,81,76,841/-

(including BED Rs. 2,04,32,78,615/- + NCCD Rs. 2,04,32,786/- + Automobile Cess Rs Rs. 25,54,098/-

              +    Edu.     Cess   *       4,12,74,228/-       +     SHE.        Cess
              *2,06,37,114/-)      should       not    be     demanded            and
                                      5          E/87501/2017,86049/2018,85181/2019

recovered from them under proviso to Section 11A(4) of Central Excise Act, 1944;

(ii) Interest should not be charged and recovered from them under Section 11AB (existing Section 11AA) of Central Excise Act, 1944; and

(iii) Penalty under Section 11AC of Central Excise Act, 1944 should not be imposed upon them.

2.7 Two more show cause notices dated 03.05.2017 and 13.04.2018 as detailed in table 1, were issued to the appellant on the same grounds.

2.8 These show cause notices were adjudicated by the impugned orders referred in para 1 above. Aggrieved appellants have filed these appeals.

3.1 We have heard Shri V Sridharan, Senior Advocate along with Shri Rajesh Ostwal and Ms Payal Nahar, Advocates for the appellant and Shri S K Mathur, Special Counsel for the revenue.

3.2 Arguing for the appellant learned counsels submits that:

 The Appellant has correctly discharged their duty liability on the transaction value i.e., price agreed between the Appellant and the dealer.

 Revenue has sought to add the amount received as financial assistance from their parent/ holding company treating it as additional consideration in terms of Rule 6 of the Valuation Rules, 2000.

 As per the Explanation Appended to Section 4 (1) of the Central Excise Act, 1944, additional consideration should flow either directly or indirectly from the buyer to the seller. This position has been settled by the Hon'ble Apex Court in the case of Mazagaon Docks Ltd. [2005 (187) ELT 3 (SC)]. Board has also clarified on the same lines vide Circular No 983/7/2014 dated 10.07.2014. Reliance is also placed on the decisions in case of o Coramandel International Ltd. [2015 (319) ELT 526) (T)] o Indorama Synthetics (I) Ltd. [2015 (323) ELT 20 (SC)] 6 E/87501/2017,86049/2018,85181/2019 o Communication World [2016 (8) TMI 25 - DELHI HIGH COURT]  Rule 6 of the Central Excise Valuation Rules, 2000 is not applicable in the present case.

 Amount received from the supplier of inputs by the manufacturer cannot be considered as additional consideration as have been held in the following decisions:

o Bisleri International Pvt. Ltd. [2005 (186) ELT 257 (SC) o Surat Beverages Pvt. Ltd. [2008 (232) ELT 830 (T)] o Diamond Beverages Pvt. Ltd [2011 (270) ELT 98 (T)] o Kandhari Beverages Pvt. Ltd [2012 (283) ELT 155 (T)] o Goa Bottling Company Ltd. [2006 (206) ELT 950 (T)] o Computer Graphics Ltd. [2010 (257) ELT 133 (T)]  Financial assistance received from holding company by the subsidiary to share the losses of the subsidiary, cannot be considered as additional consideration flowing from buyer, as have been held in the following decisions:

o Coolade Beverages Ltd. [2000 (116) ELT 622 (T-LB)] o Dhillon Cool Drinks & Beverages Ltd. [2003 (156) ELT 868 (T)]  In the case of Girdhari Lal Nanhelal Vs. Sales Tax Commissioner [(1976) 3 (SCC) 701], following was observed:

"7...For the purpose of income tax, it may in appropriate cases, be permissible to treat unexplained acquisition of money by the assessee to the assessee's income from undisclosed source and assess him as such. As against that for the purpose of levy of sales tax, it would be necessary not only to show that the source of money has not been explained but also to show the existence of some material to indicate that the acquisition of money by the assessee has resulted from transaction liable to sales tax and not from other sources."

 The contention of learned special counsel during the course of hearing that the Appellant sold cars at below the cost of manufacture, is factually incorrect and beyond the scope of show cause notice and impugned Order.

7 E/87501/2017,86049/2018,85181/2019  Decision of Hon'ble Apex Court in Fiat India Pvt. Ltd. [2012 (283) ELT 161 (SC)] is not applicable in the present case.  Without prejudice to above submissions the benefit of cum duty price should be admissible to them in terms of Explanation to Section 4 (1) (a) of the Central Excise Act, 1944 and as have been held in following cases.

       o    Meghdoot Gramoudyog Sewa Sansthan [2014 (312)
            ELT 699 (T)]
       o    Hi-Line Pens Ltd. [2017 (5) GSTL 423 (T)]
       o    Samyu Glass Pvt. Ltd. [2017 (6) GSTL 330 (T)]
    Extended      period    of   limitation   is   not      invokable.          The

objection raised by CERA, disagreed by the Central Excise Officers shows that the issue was debatable and was not free from doubt. Hence, extended period of limitation cannot be invoked in the present case. Reliance in this regard, is placed on Piramal Glass Ltd. [2011 (267) ELT 175 (Bom.)]  In the case of Prabhu Steel Industries Ltd. Vs. CCE -- 1997 (95) ELT 164 (SC), it was held, that mere change in opinion of the department officers, is not sufficient to invoke the extended period of limitation.

 The department was fully aware of all the facts and therefore the finding of suppression cannot sustain in the present case, as have been held by Hon'ble Rajasthan High Court in case of Goyal Proteins Ltd. [2017 (355) ELT 72 (Raj)] and affirmed by the Hon'ble Supreme Court as reported at 2017 (355) ELT A 27 9SC)]  Since demand is not maintainable therefore demand for interest and penalty imposed cannot be sustained 3.3 Arguing for the revenue learned special counsel while re- iterating the findings recorded in the impugned orders submitted:

 Appellant company, a manufacturer of automobiles "Motor Cars" has been receiving financial assistance every year from its holding company M/s. Skoda a.s. for purpose of improving operating margins and to ensure sustainability and long time interest of the company and therefore the provisions of Section 4(1) (a) of Central Excise Act, 1944 8 E/87501/2017,86049/2018,85181/2019 are in applicable and value is required to be determined in terms of provisions of Section 4(1)(b) of Central Excise Act 1944 read with Rule 6 of the Central Excise Valuation Rules, 2000 on account of the Additional consideration received from the parent company.

 The Appellant discharges duty on the Motor cars manufactured in its unit as per price list for its dealers and issues invoices accordingly. That, majority of the raw materials, inputs, parts are being imported from the parent company M/s. Skoda a.s. and the Appellant is 100% subsidiary company of M/s. Skoda a.s.

 Undisputedly they were receiving financial assistance from parent company for purpose of maintaining operational margins and long time sustainability of its brand.  The financial assistance received from the parent company is none else than the additional income received in connection with the manufacturing and sale of the cars and has direct nexus with the valuation.

 In case the financial assistance was not received the value of cars would be more to cover up the losses and as such the value on which the duty is discharged does not represent transaction value and hence the duty was required to be discharged on the additional consideration received from the parent company and hence the orders in original passed during the relevant periods are based upon merits, legality are sustainable.

 The case is on account of CERA audit. The fact of additional consideration being received by the appellant was never disclosed to the Central Excise department and as such they had suppressed this fact of additional income from the department and it could not be known to the department but for the disclosure of the above fact by CERA auditors and as such extended period of limitation is applicable in these cases.

4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument on appeal.

9 E/87501/2017,86049/2018,85181/2019 4.2 For adjudging against the appellant impugned orders record the findings as follows:

"4. In order to clarify the issue, relevant provisions of Central Excise Act, 1944 and Central Excise Valuation (determination of price of excisable goods) Rules, 2000 are reproduced below:

Section 4. Valuation of excisable goods for purposes of charging of duty of excise. -

(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall -

(a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value;

(b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed.

Explanation. For the removal of doubts, it is hereby declared that the price-cum-duty of the excisable goods sold by the assessee shall be the price actually paid to him for the goods sold and the money value of the additional consideration, if any, flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, and such price-cum- duty, excluding sales tax and other taxes, if any, actually paid, shall be deemed to include the duty payable on such goods.

(3)(d) "transaction value" means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.

10 E/87501/2017,86049/2018,85181/2019 Rule 6 of Central Excise Valuation (determination of price of excisable goods) Rules, 2000 Where the excisable goods are sold in the circumstances specified in clause (a) of sub section (1) of section 4 of the Act except the circumstance where the price is not the sole consideration for sale, the value of such goods shall be deemed to be the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee.

5. In view of the above provisions I find that M/s Skoda a. s. is providing additional consideration in interest of their brand and in the business interest of the noticee in guise of their corporate veil with intent to avoid the payment of Central Excise duty on the amount of financial assistance. I find that the sales value realized by the noticee is not the sole consideration and the financial assistance received from M/s Skoda a. s. shall form part of assessable value. Rule 6 of the Central Excise (Valuation) Rules, 2000, stipulates that in cases where price is not the sole consideration, the assessable value shall be based on the aggregate of the price and money value of the additional consideration flowing directly or indirectly to the noticee. Therefore, Central Excise duty on the incentive benefit of 7,53,99,09,666/- accrued to the noticee as an additional consideration is recoverable from the noticee.

6. I find that the financial assistance received by the noticee is nothing but the amount retained by the noticee in the form of other income and thus this amount is an additional income to the noticee, and accordingly rightly shown as "other income" by the noticee in their financial account. The noticee ought to have assessed and paid Central Excise duty of 2,12,81,76,841/-, against the sales effected by them. The said income/benefit of 753,99,09,666/- accrued from their company for improving operating profits. This amount has been considered as a payment made by their parent company as a sponsor to keep the brand "Skoda" in live respectable condition in India.

7. I also find that the CBEC Circular No. 983/7/2014-CX dt. 10th July 2014 as quoted by the noticee is in relation to fertilizer subsidy, and it is not related to the present issue. In the case of 11 E/87501/2017,86049/2018,85181/2019 fertilizers, the manufacturers are mandated to sale the goods at the prices notified by the Government. In the case of urea, the cost of production varies greatly from manufacturer to manufacturer The depending upon the use of feedstock, technology and overheads. Government reimbursement the differential between the cost of production and the notified price to the manufacturers in the form of subsidy. As per the current policy MRP of Urea is controlled and fixed by the Government. In P &K Fertilizer, however, the MRP is de-regulated and companies are free to fix the MRP. They do so after taking into account the subsidy components which is fixed on the basis of nutrient content (i.e. per KG subsidy is fixed by the Govt. for phosphate, potash, nitrogen and sulphur). Both in the case of Urea and P&K Fertilizer subsidy is given by the Govt. to benefit for farmers as subsidy The fertilizer policy of the would reduced the MRP paid by the farmers. Government of India is aimed at providing fertilizers to farmers at affordable prices for sustained agricultural growth and to promote balanced nutrient application. The subsidy is not linked to the buyer and it cannot be said that the subsidy given by the Government to the manufacturer is part of the consideration flowing from the buyer to the manufacturer. Likewise it cannot be said that fertilizers manufacturers have under-declared the value with a view to penetrating the market or competing with the other manufacturers of similar fertilizers. The manufacturers of fertilizers do not gain any extra commercial advantage vis-à-vis other manufacturers because of the subsidy received from the Government. The subsidy paid by the Government to the manufacturer is in larger public interest and not for benefiting any individual manufacturer seller and it is also not paid on behalf of any individual buyer or entity. In view of the above, the subsidy component is not an additional consideration and hence the MRP at which the fertilizer is sold to buyers by the manufacturers is the sole consideration for its sale. Even though the subsidy component has money value, it cannot be considered as an additional extra commercial consideration flowing from the buyer to the seller.

I also do not agree with the case law submitted by the noticee in case of Commissioner of C EX, Meerut-I v. Coolade Beverages 12 E/87501/2017,86049/2018,85181/2019 Ltd, 2000 (116) ELT 622 (Tri). For the reason as discussed herein in the case of Commissioner of Central Excise, Mumbai Vs Fiat India Pvt. Ltd., 2012 (283) ELT 161 (S.C.). The Hon'ble Supreme Court allowed the department appeal on the following grounds:

"12. Before we proceed to examine the relevant provisions, it is necessary to notice the submissions made by learned counsel on both sides. Shri Bhattacharya, the learned ASG, contends that the assessees are not fulfilling the conditions enumerated in Section 4(1)(a) of the Act and therefore, the valuation has to be done in accordance with Section 4(1)(b) of the Act read with the 1975 Valuation Rules. He would contend that the price fixed by the assessees do not reflect the true value of the goods as manufacturing cost and the profit is much higher than the sale price. He would further contend that since the price of the cars sold by the assessees do not reflect the true value of goods and that sole reason for lowering the price by the assessees below the manufacturing cost is just to penetrate the market and compete with other manufacturers and, therefore, such price cannot be treated as "normal price" in terms of Section 4(1)(a) of the Act. He would submit that since the price of the cars sold by the assessees was not ascertainable, the Revenue is justified in computing the assessable value of the goods for the levy of excise duty under Section 4(1)(b) of the Act and the relevant rules. The learned counsel further contends that under Section 4(1)(a) of the Act, value shall be deemed to be the normal price. A normal price, as per Section 4(1)(a), is the price at which the goods are ordinarily sold. A loss making price cannot be the price at which goods are ordinarily sold and the loss making price cannot be the normal price. Shri Bhattacharya would heavily rely on the decision of this Court in Union of India v. Bombay Tyre International, 1983 (14) E.L.T. 1896 (S.C.), and contends that the judgment makes it abundantly clear that for arriving at the assessable value, 13 E/87501/2017,86049/2018,85181/2019 the department is entitled to take into account the manufacturing cost plus manufacturing profit.

20. Whether the Price declared by assessees for their cars which is admittedly below the Cost of manufacture can be regarded as "normal price" for the purpose of excise duty in terms of Section 4(1)(a) of the Act. 2. Whether the sale of Cars by assessees at a price, lower than the cost of manufacture in order to compete and penetrate the market, can be regarded as the "extra commercial consideration" for the sale to their buyers which could be considered as one of the vitiating factors to doubt the normal price of the wholesale trade of the assessees.

21. The decision in the present case turns upon the interpretation of Section 4(1)(a) and Section 4(1)(b) of the Act read with relevant Rules in order to determine the correctness or otherwise of impugned judgment and order.

22. To begin with, we might like to state here that the facts of the case undoubtedly reveal that if the provisions of the Section 4(1)(b) were to apply, it may work serious hardship to the respondents-assessees as contended by learned senior counsel for the assessees, but as we are concerned with interpretation of a statutory provision, the mere fact that a correct interpretation may lead to hardship would not be a valid consideration for distorting the language of the statutory provisions.

23. Section 3 of the Act is the charging provision. The taxable event for attracting excise duty is the manufacture of excisable goods. The charge of incidence of duty stands attracted as soon as taxable event takes place and the facility of postponement of collection of duty under the Act or Rules framed thereunder can in no way effect the incidence of duty. Further, the sale or ownership of the end products is also not relevant for the purposes of taxable event under the central excise. Since excise is a duty on manufacture, duty is payable whether or not goods are sold. Duty is payable even when goods are used within the factory or goods are captively consumed within 14 E/87501/2017,86049/2018,85181/2019 factory for further manufacture. Excise duty is payable even in case of free supply or given as replacement. Therefore, sale is not a necessary condition for charging excise duty.

24. Section 3 of the Act provides for levy of duty of excise and Section 3(i) thereof states that there shall be levied and collected in the prescribed manner, a duty of excise on excisable goods manufactured in India at the rates set forth in the first Schedule. Neither Section 3 nor the first Schedule lays down the manner in which ad valorem price of the goods has to be calculated. This is found in Section 4 of the Act. Section 4 of the Act lays down the measure by reference to which the duty of excise is to be assessed. The duty of excise is linked and chargeable with reference to the value of the exercisable goods and the value is further defined in express terms by the said Section. In every case, the fundamental criterion for computing the value of an excisable article is the normal price at which the excisable article is sold by the manufacturer, where the buyer is not a related person and the price is the sole consideration. If these conditions are satisfied and proved to the satisfaction of the adjudicating authority, then, the burden which lies on the assessee under Section 4(1)(a) would have been discharged and the price would not be ignored and the transaction would fall under the protective umbrella contained in the Section itself.

27. It is well settled that whenever the legislature uses certain terms or expressions of well-known legal significance or connotations, the courts must interpret them as used or understood in the popular sense if they are not defined under the Act or the Rules framed thereunder. Popular sense means "that sense which people conversant with the subject matter, with which the statute is dealing, would attribute to it."

28. The normal rule of interpretation is that the words used by the legislature are generally a safe guide to its intention. Lord Reid in Westminster Bank Ltd. v. Zang [(1966) A.C. 182] observed that 'no principle of 15 E/87501/2017,86049/2018,85181/2019 interpretation of statutes is more firmly settled than the rule that the court must deduce the intention of Parliament from the words used in the Act." Applying such a rule, this Court observed in S. Narayanaswami v. G. Pannerselvam & Ors., (1973) 1 SCR 172 that 'Where the statute's meaning is clear and explicit, words cannot be interpolated.'

32. In Commissioner of Central Excise, Ahmedabad v. Xerographic Ltd., (2006) 9 SCC 556 = 2010 (257) E.L.T. 11 (S.C.), this Court has explained the concept of normal price. That was in the context of transaction between the related persons. It was observed "that the existence of any extra commercial consideration while fixing a price would not amount to normal price."

35. In Union of India and others v. Bombay Tyre International Ltd & Ors. (1984) 1 SCC 467 = 1983 (14) E.L.T. 1896 (S.C.), it is held that "it is true, we think, that the new Section 4(1) contains inherently within it the power to determine the true value of the excisable article, after taking into account any concession shown to a special or favoured buyer because of extra-commercial considerations, in order that the price be ascertained only on the basis that it is a transaction at arm's length. That requirement is emphasised by the provision in the new Section 4(1)(a) that the price should be the sole consideration for the sale. In every such case, it will be for the Revenue to determine on the evidence before it whether the transaction is one where extra-commercial considerations have entered and, if so, what should be the price to be taken as the value of the excisable article for the purpose of excise duty."

40. In CCE v. Bisleri International (P) Ltd., (2005) 6 SCC 58 (at page 61) = 2005 (186) E.L.T. 257 (S.C.), it is held :

"10. At the outset, it may be mentioned that under Section 4(1)(a), "value" in relation to any excisable goods is a function of the price. In other words, "value" is derived from the normal price at the factory gate charged to an unrelated person on wholesale basis and at the time and place of removal.

16 E/87501/2017,86049/2018,85181/2019

11. It is for the Department to examine the entire evidence on record in order to determine whether the transaction is one prompted by extra- commercial considerations. It is well settled that under Section 4 of the said Act, as it stood at the material time, price is adopted as a measure or a yardstick for assessing the tax. The said measure or yardstick is not conclusive of the nature of the tax. Under Section 4, price and sale are related concepts. The "value" of the excisable article has to be computed with reference to the price charged by the manufacturer, the computation being made in accordance with Section 4. In every case, it will be for the Revenue to determine on evidence whether the transaction is one where extra- commercial considerations have entered and, if so, what should be the price to be taken into account as the value of the excisable article for the purpose of excise duty. These principles have been laid down in the judgment of this Court in the case of Union of India v. Bombay Tyre International Ltd."

43. What can be construed from the plain reading of Section 4 of the Act and the interpretation that is given by this Court on the expression 'normal value' is, where excise duty is chargeable on any excisable goods with reference to value, such value shall be deemed to be the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal and where the assessee and the buyer have no interest directly or indirectly in the business of each other and the price is the sole consideration for the sale. Normal price, therefore, is the amount paid by the buyer for the purchase of goods. In the present case, it is the stand of the revenue that 'loss making price' cannot be the 'normal price' and that too when it is spread over for nearly five years and the consideration being only to penetrate the market and compete with other manufacturers who are manufacturing more or less similar cars and selling at a lower price. The existence of extra commercial consideration while fixing 17 E/87501/2017,86049/2018,85181/2019 the price would not be the 'normal price' as observed by this Court in Xerographic Ltd.'s case (supra). If price is the sole consideration for the sale of goods and if there is no other consideration except the price for the sale of goods, then only provisions of Section 4(1)(a) of the Act can be applied. In fact, in Metal Box's case (supra) this Court has stated that under sub-Section (1)(a) of Section 4 of the Act, the 'normal price' would be the price which must be the sole consideration for the sale of goods and there cannot be any other consideration except the price for the sale of goods and it is only under such situation Sub- Section (1)(a) of Section 4 would come into play. In the show cause notices issued, the Revenue doubts the normal price of the wholesale trade of the assessees. They specifically allege, which is not disputed by the assessees, that the 'loss making price' continuously for a period of more than five years while selling more than 29000 cars, cannot be the normal price. It is true that in notices issued, the Revenue does not allege that the buyer is a related person, nor do they allege element of flow back directly from the buyer to the seller, but certainly, they allege that the price was not the sole consideration and the circumstance that no prudent businessman would continuously suffer huge loss only to penetrate the market and compete with other manufacturer of more or less similar cars. A prudent businessman or woman and in the present case, a company is expected to act with discretion to seek reasonable income, preserve capital and, in general, avoid speculative investments. This court in the case of Union of India v. Hindalco Industries - 2003 (153) E.L.T. 481, has observed that, 'if there is anything to suggest to doubt the normal price of the wholesale trade, then recourse to clause (b) of sub-section (1) of Section 4 of the Act could be made'. That the price is not the normal price, is established from the following three circumstances which the assessees themselves have admitted; that the price of the cars was not based on the manufacturing cost and manufacturing profit, but have fixed at a lower price to penetrate the market; though the normal price for their 18 E/87501/2017,86049/2018,85181/2019 cars is higher, they are selling the cars at a lower price to compete with the other manufacturers of similar cars. This is certainly a factor in depressing the sale price to an artificial level; and, lastly, the full commercial cost of manufacturing and selling the cars was not reflected in the lower price. Therefore, merely because the assessee has not sold the cars to the related person and the element of flow back directly from the buyer to the seller is not the allegation in the show cause notices issued, the price at which the assessees had sold its goods to the whole sale trader cannot be accepted as 'normal price' for the sale of cars.

51. Excise is a tax on the production and manufacture of goods and Section 4 of the Act provides for arriving at the real value of such goods. When there is fair and reasonable price stipulated between the manufacturer and the wholesale dealer in respect of the goods purely on commercial basis that should necessarily reflect a dealing in the usual course of business, and it is not possible to characterise it as not arising out of agreement made at arms length. In contrast, if there is an extra-ordinary or unusual price, specially low price, charged because of extra-commercial considerations, the price charged could not be taken to be fair and reasonable, arrived at on purely commercial basis, as to be counted as the wholesale cash price for levying excise duty under Section 4(1)(a) of the Act.

52. The next submission of Shri Bhattacharya, learned ASG, is that the price at which the cars sold by the assessees is not the sole consideration as envisaged under Section 4(1)(a) of the Act. He would contend that admittedly there exists a consideration other than the price, that is, to penetrate the market. He would also submit that the lower price would enable the assessee to generate higher turnover and this higher turnover is monetary consideration for the assessee received directly from various buyers. In other words, he would submit, the intention to penetrate the market is intertwined with 19 E/87501/2017,86049/2018,85181/2019 receiving a higher monetary turnover. Therefore, the price is not the sole consideration. However, it is contended by learned senior counsel Shri Vellapally that the reason for the assessees for selling their cars at a lower price than the manufacturing cost was because the assessees had no foothold in the Indian market and, therefore, had to sell at a lower price than the manufacturing cost and profit in order to compete in the market. He would submit that the intention of the assessees to penetrate the market cannot be treated as extra commercial consideration as it does not flow from the buyer to the seller. Therefore, there is no additional consideration flowing from buyer to seller and whole transaction is bona fide.

53. Now what requires to be considered is what is the meaning of the expression 'sole consideration'. Consideration means something which is of value in the eyes of law, moving from the plaintiff, either of benefit to the plaintiff or of detriment to the defendant. In other words, it may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given, suffered or undertaken by the other, as observed in the case of Currie v. Misa, (1875) LR 10 Ex. 153.

58. From a conspectus of decisions and dictionary meaning, the inescapable conclusion that follows is that 'consideration' means a reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee. Similarly, when the word 'consideration' is qualified by the word 'sole', it makes consideration stronger so as to make it sufficient and valuable having regard to the facts, circumstances and necessities of the case.

60. Since under new Section 4(1)(a) the price should be the sole consideration for the sale, it will be open for the Revenue to determine on the basis of evidence whether a particular transaction is one where extra-commercial consideration has entered and, if so, what should be the price to be taken as the value of the excisable article for 20 E/87501/2017,86049/2018,85181/2019 the purpose of excise duty and that is what exactly has been done in the instant cases and after analysing the evidence on record it is found that extra-commercial consideration had entered into while fixing the price of the sale of the cars to the customers. When the price is not the sole consideration and there are some additional considerations either in the form of cash, kind, services or in any other way, then according to Rule 5 of the 1975 Valuation Rules, the equivalent value of that additional consideration should be added to the price shown by the assessee. The important requirement under Section 4(1)(a) is that the price must be the sole and only consideration for the sale. If the sale is influenced by considerations other than the price, then, Section 4(1)(a) will not apply. In the instant case, the main reason for the assessees to sell their cars at a lower price than the manufacturing cost and profit is to penetrate the market and this will constitute extra commercial consideration and not the sole consideration. As we have already noticed, the duty of excise is chargeable on the goods with reference to its value then the normal price on which the goods are sold shall be deemed to be the value, provided : (1) the buyer is not a related person and (2) the price is the sole consideration. These twin conditions have to be satisfied for the case to fall under Section 4(1)(a) of the Act. We have demonstrated in the instant cases, the price is not the sole consideration when the assessees sold their cars in the wholesale trade. Therefore, the assessing authority was justified in invoking clause(b) of Section 4(1) to arrive at the value of the exercisable goods for the purpose of levy of duty of excise, since the proper price could not be ascertained. Since, Section 4(1)(b) of the Act applies, the valuation requires to be done on the basis of the 1975 Valuation Rules.

66. In our considered view, either the decision of Guru Nanak's case (supra) or the decision in Bisleri's case (supra) would assist the assessee in any manner whatsoever. We say so for the reason, that, in Guru 21 E/87501/2017,86049/2018,85181/2019 Nanak's case, the department had accepted the price declared by the assessee and the narration of the facts both by the Tribunal and this Court would reveal that it was one time transaction and lastly, this Court itself has specifically observed that the view that they have taken, is primarily based on the facts and circumstances of the case. In the instant cases, the department never accepted the declared value. It is for this reason, provisional assessments were completed instead of accepting declared price by the assessee under Rule 9B of the Rules inter alia holding that during the enquiry, the assessees had admitted that they did not have any basis to arrive at the assessable value but they are selling their goods at 'loss price' only to penetrate the market. Secondly, as we have already noticed that for nearly five years the assessee was selling its cars in the wholesale trade for a 'loss price' and therefore, the conditions envisaged under Section 4(1)(a) of the Act, namely; the normal price, ordinarily sold and sole consideration are not satisfied. We further hold that the decision in Bisleri's case (supra) will also not assist the assessees for the reason that the issue that came up for consideration is entirely different from the legal issue raised in these civil appeals. Before we conclude on this issue, we intend to refer to the often quoted truism of Lord Halsbury that a case is only an authority for what it actually decides and not for what may seem to follow logically from it. We may also note the view expressed by this Court in the case of Sushil Suri v. Central Bureau of Investigation & Anr. (2011) 5 SCC 708, wherein this Court has observed, "Each case depends on its own facts and a close similarity between one case and another is not enough because either a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." We do not intend to overload this judgment 22 E/87501/2017,86049/2018,85181/2019 by referring to other decisions on this well settled legal principle.

67. Reference to Valuation Rules : Shri Bhattacharya, the learned ASG, contends that the assessees are not fulfilling the conditions enumerated in Section 4(1)(a) of the Act and therefore, the valuation has to be done in accordance with Section 4(1)(b) read with the 1975 Valuation Rules. He would submit that since the price of the cars sold by the assessee was not ascertainable, the Revenue is justified in computing the assessable value of the goods for the levy of excise duty under Section 4(1)(b) of the Act and the relevant rules. He would further submit that the Valuation Rules need not be applied sequentially. He would contend that all the Rules 3, 4, 5, 6 and 7 of the 1975 Valuation Rules specifically use the expression "shall...be determined", "shall be based" or "shall determine the value" and nowhere word "sequentially" occurs in these Rules, unlike Rule 3(ii) of the Customs Valuation Rules, 1988. He would submit that merely the presence of word "shall" does not imply that all the Rules has to be applied sequentially. He would further submit that in the facts and circumstances of the present cases, Rule 7 is the only applicable Rule in view of the decision in Bombay Tyre's case and assessing authority as well as the first appellate authority correctly adopted the application of this Rule.

70. Rule 2 of the 1975 Valuation Rules provides for definition of certain terms, such as "proper officer", "value" etc., Rule 3 of the above Rules, provides that the value of any excisable goods, for the purposes of Clause (b) of Sub-Section (1) of Section 4 of the Act be determined in accordance with these Rules. Rule 4 provides that the value of the excisable goods shall be based on the value of such goods by the assessee for delivery at any other time nearest to the time of removal of goods under assessment. Rule 5 provides that when the goods are sold in the circumstances specified in Clause (a) of Sub-Section (1) of Section (4) of the Act except that the price is not the sole consideration, the value of such goods shall be based on 23 E/87501/2017,86049/2018,85181/2019 the aggregate price and the amount of the money value of any additional consideration flowing directly or indirectly from the buyer to the assessee. Rule 6 provides, that, if the value of the excisable goods under assessment cannot be made, then to invoke provisions of Rule 6 of the Rules, wherein certain adjustments requires to be made as provided therein. Rule 7 is in the nature of residuary clause. It provides that if the value of excisable goods cannot be determined under Rule 4, 5 and 6 of the Rules, the adjudging authority shall determine the value of such goods according to the best of his judgment and while doing so, he may have regard to any one or more methods provided under the aforesaid Rules. A bare reading of these rules does not give any indication that the adjudging authority while computing the assessable value of the excisable goods, he had to follow the rules sequentially. The rules only provides for arriving at the assessable value under different contingencies. Again, Rule 7 of the Valuation Rules which provides for the best judgment assessment gives an indication that the assessing authority while quantifying the assessable value under the said Rules, may take the assistance of the methods provided under Rules 4, 5 or 6 of the Valuation Rules. Therefore, contention of the learned counsel that the assessing authority before invoking Rule 7 of the 1975 Valuation Rules, ought to have invoked Rules 4, 5 and 6 of the said Rules cannot be accepted. In our view, since the assessing authority could not do the valuation with the help of the other rules, has resorted to best judgment method and while doing so, has taken the assistance of the report of the 'Cost Accountant' who was asked to conduct special audit to ascertain the correct price that requires to be adopted during the relevant period. Therefore, we cannot take exception of the assessable value of the excisable goods quantified by the assessing authority."

8. I find that in the case of Commissioner of Central Excise, Mumbai Vs Fiat India Pvt. Ltd., 2012 (283) ELT 161 (S.C.) the price of the cars sold by the assessee did not reflect the true 24 E/87501/2017,86049/2018,85181/2019 value of goods and that sole reason for lowering the price by the assessee below the manufacturing cost is just to penetrate the market and compete with the other manufacturers and therefore such price cannot be treated as normal price in terms of Section 4(1)(a) of the Central Excise Act, 1944. A loss making price cannot be the price at which the goods are ordinarily sold and the loss making price cannot be the normal price. Likewise in the instant case the noticee has received the financial assistance from their parent company i.e. M/s SAIPL a.s. to improve operating margins and to ensure the noticees sustainability and long term interest. This financial assistance is the consideration flowing for extra commercial advantage for the noticee and should be included in the assessable value for payment of the Central Excise duty. Further it has been laid down by Section 4(1)(a) that normal price would be price which must be the sole consideration for the sale of goods and there could not be other consideration except the price for the sale of the goods and only under such a situation sub-section (1) (a) would come into play. I find that in the case of Commissioner of Central Excise, Mumbai Vs Fiat India Pvt. Ltd., 2012 (283) ELT 161 (S.C.) the revenue does not alleged that buyer is a related person, nor do they alleged element of flow back directly from the buyer to the seller, but certainly, they alleged that the price was not the sole consideration and the circumstances that no prudent businessman would continuously suffer huge loss only to penetrate the market and compete with other manufacturer of more or less similar cars. A prudent businessman or women is expected to act with discretion to seek reasonable income, reserved capital and in general avoid speculative investment. In the present case also the buyer is not a related person nor there is element of flow back directly from the buyer to the seller but certainly the noticee has undervalued the assessable value by not adding the financial assistance received from the parent company i.e. M/s SAIPL a.s. I also find that as per para 60 of M/s Fiat India Pvt. Ltd. Case (supra) the Hon'ble Supreme Court has held that since under new Section 4(1)(a) the price should be the sole consideration for the sale, it will be open for the revenue to determine on the basis of evidence whether a particular transaction is one where extra commercial 25 E/87501/2017,86049/2018,85181/2019 consideration has entered and, if so, what should be the price to be taken as the value of the Excisable article for the purpose of excise duty and i.e. what exactly has been done in the instant cases and after analyzing the evidence on record it is found that extra commercial consideration entered into while fixing the price of the sale of the cars to the customers. When the price is not the sole consideration and there are some additional considerations either in the form of cash, kind, services or in any other way, then according to Rule 5 of the 1975 Valuation Rules, the equivalent value of that additional consideration should be added to the price shown by the assessee. The important requirement under Section 4(1)(a) is that the price must be the sole and only consideration for the sale. If the sale is influence by consideration other than the price, then Section 4(1)(a) will not apply. I find that in the instant case the financial assistance is to help the noticee to improve its operating margins as the lower margins are due to sales with lesser margin of profit and by not including the financial assistance received from M/s SAIPL a.s., the sale value realized by the noticee is not the sole consideration and therefore the equivalent value of additional consideration i.e. the financial assistance needs to be added in the assessable value.

9. Thus, in view of above, I find that the noticee has received the financial assistance from M/s SAIPL a.s. to improve operating margins and to ensure the noticee's sustainability and long term interest. Both the Corporate Companies are safeguarding the interest of each others and making efforts to increase their profit margin in corporate veil with intent to avoid the payment of Central Excise Duty on the amount of financial assistance. The financial assistance is the consideration flowing for extra commercial advantage for the noticee and should be included in the assessable value.

10. Further, the assessee is working under "Self Assessment"

scheme and filling Monthly Return viz. ER 1, which includes information / data regarding activities conducted / carried out by the assessee during a month such as Production of excisable goods, Clearances of excisable goods for home consumption, Export or Other purposes, Assessable / Transaction value of 26 E/87501/2017,86049/2018,85181/2019 excisable goods cleared, payment of Central Excise duties, Availment of Cenvat credit on inputs & Capital goods and of Service Tax paid on various Services etc., is permissible / available to and is being adopted & done by the assessee and hence the assessee are fully responsible for genuineness & correctness of information / data given & furnished in such statutory return. Great responsibility. is cast upon them for correct assessment of duty and for availment of admissible credit and to comply with the provisions of Cenvat Credit Rules, 2004. The "noticee have accrual of the benefit of Rs.753,99,09,666/- during the period from 2010-11 to 2014-15 but they have suppressed the facts with intention to evade payment of duty. These facts came to notice of the department after scrutiny of records of the noticee. Hence Section 11(A)(4) of Central Excise Act, 1944 is rightly invokable in this case. Further by their above acts of omission & commission the noticee have contravened the provisions of Section 4 of Central Excise Act, 1944 and Rule 6 of the Central Excise (Valuation) Rules, 2000 read with Rule 4, 6 & 8 of Central Excise Rules, 2002 with intention to evade payment of Central Excise duty. The assessee has failed to discharge their obligation. Therefore, extended period as provided under Section

11 A (1) (now Section 11A(4)) of Central Excise Act, 1944 is rightly invokable in this case for recovery of amount. The noticee is also liable to pay interest under the provisions of Section 11AB (now Section 11AA) of the Central Excise Act 1944. The noticee is also liable for penalty under the provisions of Section 11AC of the Central Excise Act 1944."

4.3 From the impugned order it is evident that entire demand has been confirmed against the appellant relying solely on the decision of Hon'ble Apex Court in the case of FIAT India Pvt Ltd. [2012 (283) ELT 161 (SC)]. The facts in the case of FIAT India are distinguishable. Even CBEC has clarified by, Circular No. 979/03/2014-CX dated 15.1.2014 that the Hon'ble Supreme Court has not ruled that transaction value can be rejected in all cases where the declared value is lower than the manufacturing cost and profit, by referring to Para 50 of the Fiat India judgment, the circular clarifies as follows:

27 E/87501/2017,86049/2018,85181/2019 "2... The Hon'ble Supreme Court has not ruled that transaction value can be rejected in all cases where the declared value is lower than the manufacturing cost and profit.

2.1... The Hon'ble Court has further held that these examples are not exhaustive. Therefore, mere sale of goods below the manufacturing cost and profit cannot be taken as the sole basis for rejecting the transaction value.

3... In addition, due care may be taken at the level of the Commissioner to see whether the case at hand is similar to the facts and circumstances of the FIAT case."

4.4 The facts in the case of the FIAT India Pvt Ltd., as recorded in the decision of Hon'ble Apex Court are reproduced below:

"2. Facts in nutshell are : The respondents-assessees are the manufacturer of motor cars, i.e. Fiat UNO model cars. The said goods are excisable under chapter sub-heading No. 8703.90 of the Central Excise Tariff Act, 1985. The said business was initially managed by M/s. Premier Automobiles Ltd. However, M/s. Premier Automobile surrendered its central excise registration on 6-4-1998. Thereafter, M/s. Ind. Auto Ltd. (now M/s. Fiat India Ltd.) carried on the said business after obtaining fresh central excise registration. The assessees have filed several price declarations in terms of Rule 173C of the Central Excise Rules, 1944 (hereinafter referred to as 'the 1944 Rules') declaring wholesale price of their cars for sale through wholesale depots during the period commencing from 27-5-1996 to 4-3- 2001.

3. The authorities under the Central Excise Act, 1944 (hereinafter referred to as 'the Act') had made enquiries on 20- 12-1996 and 31-12-1996, under Sub-rule 3 of Rule 173C of the 1944 Rules read with Section 14 of the Act. They had prima facie found that the wholesale price declared by the assessees is much less than the cost of production and, therefore, the price so declared by them could not be treated as a normal price for the purpose of quantification of assessable value under Section 4(1)(a) of the Act and for levy of excise duty as it would amount to short payment of duty.

28 E/87501/2017,86049/2018,85181/2019

4. Since further enquiry was required to be conducted regarding the assessable value of the cars, the Assistant Commissioner, Central Excise, Kurla Division, vide his order dated 3-1-1997, had inter alia directed for the provisional assessment of the cars at a price which would include cost of production, selling expenses (including transportation and landing charges, wherever necessary from 28-9-1996) and profit margin, on the ground that the cars were not ordinarily sold in the course of wholesale trade as the cost of production is much more than their wholesale price, but were sold at loss for a consideration, that is, to penetrate the market which has been confirmed by the assessee vide its letter dated 30-10-1996 and during the course of enquiry under Section 14 of the Act read with sub-rule (3) of Rule 173C of the 1944 Rules. He had further directed the respondents to execute B-13 bond for payment of differential duty with surety or sufficient security, that is, 25% of the bond amount. Thereafter, respondents executed B-13 bond for Rs. 7.70 crores. However, the respondents showed their inability to submit 25% bond amount as a bank guarantee and requested the Revenue authorities to reduce the same. On such request, the Commissioner, vide letter dated 23-4-2007, directed the respondents to execute bank guarantee equivalent to 5% of the bond amount. Accordingly, the respondent furnished a bank guarantee of Rs. 38 lakhs which was subsequently renewed and later fresh bank guarantees in lieu of original were submitted by the respondents.

5. The Preventive and Intelligence Branch of the Kurla Division sometime in the year 1997-98 had conducted investigation into the affairs of the respondents, whereby it was found that the respondents were importing all the kits in CKD/SKD condition for manufacturing the cars and the cost of production of a single car was Rs. 3,98,585/- for manufacture from SKD condition and Rs. 3,80,883/- for manufacture from CKD condition against the assessable value of Rs. 1,85,400/-. In the investigation, it was also revealed that the respondents had entered into a spin-off agreement vide Deed of Assignment dated 30-3-1998, whereby M/s. Fiat India Ltd. would be liable for any excise liability 29 E/87501/2017,86049/2018,85181/2019 accruing from 29-9-1997 onwards, in respect of the cars in issue.

6. After completion of the investigation, the Commissioner of Central Excise, Mumbai-II, had appointed Cost Accountant M/s. Rajesh Shah and Associates on 25-1-1999 under Section 14A of the Act to conduct special audit to ascertain the correctness of the price declared by the respondents. The Cost Accountant had calculated the average price of the Fiat UNO Car by adding material cost (import, local, painting and others), rejection at 1% of total cost and notional profit at 5% of total cost for the period from April, 1998 to December, 1998 vide his report dated 31-3-1999, which came to Rs. 5,04,982/- per car."

We do not find any similarity in the facts of the case for before us and the case of the FIAT India Pvt Ltd., as reproduced above, except that both the case are in respect of the automobile manufacturers. In the investigations made in the present case are not on the same lines as that in the case considered by the Hon'ble Apex Court. It is not even the case of the revenue in these appeals that the motor cars sold by the appellant were being sold below the cost of production. In the case before us revenue seeks to add the amount received as financial assistance from the principals/ holding company of the appellant to the assessable value as additional consideration in terms of rule 6 of the Valuation Rules, 2000.

4.5 The first question that needs to be considered by us is whether the amounts received by the appellant from their principals can be considered as additional consideration in terms of the provisions of Central Excise Act, 1944, and the Rules made thereunder. To understand the meaning of the term additional consideration, we refer to the explanation appended to section 4 (1) of the Central Excise Act, 1944, wherein following has been explicitly stated:

"Explanation: .....the money value of the additional consideration, if any flowing directly or indirectly from the buyer to the assessee in connection with the sale of such goods, ...."

30 E/87501/2017,86049/2018,85181/2019 This the Central Excise Act, 1944, itself states that the additional consideration is the money value, that flows directly or indirectly from the buyer to the seller, in connection with the sale of transacted goods, over and above the transaction price. In the present case revenue has not adduced any evidence or has not even alleged that this Financial Assistance was received by the appellant from their buyer in connection with the sale of the impugned cars. In case of Bisleri International Pvt Ltd. [2005 (186) E.L.T. 257 (S.C.)] "11.At the outset, it may be mentioned that under Section 4(1)(a), "value" in relation to any excisable goods is a function of the price. In other words, "value" is derived from the normal price at the factory gate charged to an unrelated person on wholesale basis and at the time and place of removal.

12.It is for the department to examine the entire evidence on record in order to determine whether the transaction is one prompted by extra-commercial considerations. It is well settled that under Section 4 of the said Act, as it stood at the material time, price is adopted as a measure or a yardstick for assessing the tax. The said measure or yardstick is not conclusive of the nature of the tax. Under Section 4, price and sale are related concepts. The "value" of the excisable article has to be computed with reference to the price charged by the manufacturer, the computation being made in accordance with Section 4. In every case, it will be for the revenue to determine on evidence - whether the transaction is one where extra-commercial considerations have entered and, if so, what should be the price to be taken into account as the value of the excisable article for the purpose of excise duty. These principles have been laid down in the judgment of this Court in the case of Union of India & Others v. Bombay Tyre International Ltd. etc. reported in AIR 1984 SC 420.

13.The short question which arises for determination in the present case is - whether the department has been able to show that the intrinsic price of aerated water was more than the price actually charged to the buyer? According to the department, the actual price was lower on account of incentives given by M/s. Britco, the supplier of concentrates to the assessee. As found by 31 E/87501/2017,86049/2018,85181/2019 the adjudicating authority as well as by the Tribunal, the prices had to be reduced by the assessee on account of competition in the market. Further, the prices stood reduced on account of concession given by M/s. Britco, supplier of concentrates (raw material), to the assessee. There is no evidence of flow back of any additional consideration from the buyers of aerated water (beverage) to the assessee. On account of cut throat competition from Pepsi, M/s. Britco had to provide incentive to the assessee. But for the incentive from the supplier of concentrates (raw material), the assessee was not in a position to face acute competition from Pepsi. On the other hand, the evidence on record indicates that price uniformity was maintained. No favour for extra commercial reasons were shown to any of the buyers of aerated water. There is no evidence of any concession to any of the buyers. There is no evidence of existence of any favoured buyers. In the circumstances, Rule 5 is not applicable."

By referring to this decision Hon'ble Apex Court has in case of FIAT India Pvt Ltd., has observed as follows:

"65. In Bisleri's case, the issue as noted by the Court was, whether the assessee had undervalued the aerated water (Beverages) by excluding two items, namely, the amounts received under credit notes as price support incentive and rent on containers as assessable value. The Court after referring to provisions of Section 4(1)(a) of the Act and the decision of this Court in Bombay Tyre's case (supra) has held that the amounts received under credit notes as price support incentives from supplier of raw materials cannot be included in the assessable value, since the department failed to prove that there was flow back of additional consideration from buyers of aerated waters to the assessee and further, the price was not uniformly maintained and favour of exra-commercial consideration was shown to the buyers of aerated waters (beverages). The Court has also observed that under Section 4, the price and sale are related concepts. The value of the excisable article has to be computed with reference to the price charged by the manufacturer, the computation being made in accordance with Section 4. In every case, it will be for the revenue to determine on evidence whether the transaction is one where extra-commercial consideration

32 E/87501/2017,86049/2018,85181/2019 have entered and if so, what should be the price to be taken into account as the value of the excisable article for the purpose of excise duty.

66. In our considered view, either the decision of Guru Nanak's case (supra) or the decision in Bisleri's case (supra) would assist the assessee in any manner whatsoever. We say so for the reason, that, in Guru Nanak's case, the department had accepted the price declared by the assessee and the narration of the facts both by the Tribunal and this Court would reveal that it was one time transaction and lastly, this Court itself has specifically observed that the view that they have taken, is primarily based on the facts and circumstances of the case. In the instant cases, the department never accepted the declared value. It is for this reason, provisional assessments were completed instead of accepting declared price by the assessee under Rule 9B of the Rules inter alia holding that during the enquiry, the assessees had admitted that they did not have any basis to arrive at the assessable value but they are selling their goods at 'loss price' only to penetrate the market. Secondly, as we have already noticed that for nearly five years the assessee was selling its cars in the wholesale trade for a 'loss price' and therefore, the conditions envisaged under Section 4(1)(a) of the Act, namely; the normal price, ordinarily sold and sole consideration are not satisfied. We further hold that the decision in Bisleri's case (supra) will also not assist the assessees for the reason that the issue that came up for consideration is entirely different from the legal issue raised in these civil appeals. Before we conclude on this issue, we intend to refer to the often quoted truism of Lord Halsbury that a case is only an authority for what it actually decides and not for what may seem to follow logically from it. We may also note the view expressed by this Court in the case of Sushil Suri v. Central Bureau of Investigation & Anr. (2011) 5 SCC 708, wherein this Court has observed, "Each case depends on its own facts and a close similarity between one case and another is not enough because either a single significant detail may alter the entire aspect. In deciding such cases, one should 33 E/87501/2017,86049/2018,85181/2019 avoid the temptation to decide cases (as said by Cardozo) by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." We do not intend to overload this judgment by referring to other decisions on this well settled legal principle."

The in case of FIAT thus Hon'ble Supreme Court after referring to the decision in the case of Bisleri has observed that the facts needs to be determined in each case before applying the ratio of the decision. In case of Indorama Synthetics [2015 (323) ELT 20 (SC)] Hon'ble Apex Court explaining the provisions of Rule 6 observed as follows:

"10. Even when these goods are sold by the assessee at different prices to different classes of buyers (not being related persons), each such price is to be deemed to be the normal price of such goods in relation to each class of buyers. However, as per the definition of 'transaction value' contained in this very section, i.e. Section 4(3)(d), certain charges can be added to the price at which the goods are actually sold, under certain circumstances. These include the provision for advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty commission etc. In the present case, we are not concerned with this aspect. However, Rule 6 of the Rules specifies that if the goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section 4, then the value of such goods shall be deemed to be the aggregate of such transaction value plus the 'amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee'. The implication of this Rule is that any form of additional consideration which flows from the buyer to the assessee, monitory value thereof is to be included while arriving at the transaction value. It is not necessary that such an additional consideration is to flow directly and even indirect consideration is includible..."

A Larger Bench of Tribunal has in identical facts of the case, in case of Coolade Beverages [2000 (116) ELT 622 (T-LB)] has observed as follows:

34 E/87501/2017,86049/2018,85181/2019

8. The submissions in the appeal relating to valuation of goods under Rule 5 of the Valuation Rules also is wholly without basis. The Rule itself reads as under :-

"Where the excisable goods are sold in the circumstances specified in clause (a) of sub-section (l) of Section 4 of the Act except that the price is not the sole consideration, the value of such goods shall be based on the aggregate of such price and the amount of the money value of any additional consideration flowing directly or indirectly from the buyer to the assessee."

It is clear from the words used that "any additional consideration flowing directly or indirectly from the buyer to the assessee (emphasis supplied) alone is to be added where excisable goods are sold in the circumstances specified in clause (a) of sub- section 1 of Section 4 of Central Excise Act." The Commissioner was right in following this clear provision of law. The Revenue's submissions that "the adjudicator has given a simple reading to Rule 5 which, inter alia, requires that additional consideration should flow directly or indirectly from the buyer to the assessee"

and that "he has never tried to go with the spirit of issuing Credit Note by Britco to the party", are totally against the canons of interpretation of statutes. The meaning of a legal provision is to be obtained from the plain meaning of the words used. Looking for the "spirit" of a provision is permissible only in cases of ambiguity in the language of the statute and not otherwise. This being the legal position, Revenue's appeal on this score also has to fail."

4.6 We also note that the issue in the present case is based on the audit objection raised by CERA. The CERA objection in the initial stage was not admitted by the jurisdictional authorities and replied by the authorities stating as follows:

"3.2 While raising the objection CERA has not appreciated the legal position correctly in as much as additional consideration flowing directly, or indirectly has to be from the buyer to the assessee (in connection with the sale of such goods) and not from anyone or from holding company. CERA has not placed any evidence on record to establish that the financial assistance received by M/s SAIPL from their parent company M/s Skoda a.s 35 E/87501/2017,86049/2018,85181/2019 is the additional consideration flowing directly or indirectly to them from the buyers of M/s SAIPL.

3.3 Skoda Auto a.s, is holding company of M/s SAIPL arid there is no seller and buyer Relationship between the two. The goods are sold by M/s SAIPL to dealers on principal-to-principal basis. Further, there is no evidence, of financial flow back of the said additional consideration between Skoda Auto a.s and the dealers/customers of M/s SAIPL i.e M/s Skoda Auto a.s are not getting any additional consideration from dealers/customers of M/s SAIPL. CERA has not adduced any evidence to show that M/s Skoda a.s are the buyers of the goods manufactured by M/s SAIPL, Aurangabad. In absence of any evidence to show that M/s Skoda a.s are the buyers, the financial assistance of Rs. 464.41 Crs provided by the holding company M/s Skoda a.s cannot be termed as additional consideration under Section 4 of the Central Excise Act, 1944, flowing from the buyer to the assesses and therefore cannot at all be added to the assessable value.

3.4 In view of the above factual and legal position, the objection raised by CERA is not acceptable and needs to be dropped."

Above correspondence establishes beyond any iota of doubt that the revenue was having the same view as has been discussed by us above.

4.7 Appellant has also placed reliance on the Circular No. 983/7/2014-CX dated 10.7.2014 wherein following has been clarified:

"4.2 The fertilizer policy of the Government of India is aimed at providing fertilizers to farmers at affordable prices for sustained agricultural growth-and to promote balanced nutrient application. The subsidy is not linked to the buyer, and it cannot be said that the subsidy given by the Government to the manufacturer is part of the consideration flowing from the buyer to the manufacturer. Likewise, it cannot be said that fertilizer manufacturers have under-declared the value with a view to penetrating the market or competing with the other manufacturers of similar fertilizers."

36 E/87501/2017,86049/2018,85181/2019 The above clarification issued by the Board though in relation to Fertilizer Subsidy, given by the Government of India, is squarely applicable to the facts of the case in hand. In the present case certain financial assistance has been given by the principals/ holding company of the appellant, in order to sustain and make their business viable in long run. It is well established principle of business management that no company starts making profit in respect of the goods manufactured and cleared by them from the day one. It is only over period of time that they break even and move from the loss making to profitable enterprise. For this purpose they will undertake break even analysis. A break-even analysis weighs the costs of a new business, service or product against the unit selling price to determine the point at which business will break even. It determines the point at which business would have sold enough units to cover all the costs incurred i.e. the point from which the business will transform from a loss making venture to the profitable venture. Thus Hon'ble Supreme Court in case of FIAT India Pvt Ltd., in para 50 observed as follows:

"50. In the context of Section 4(1)(a) of the Act, the word 'ordinarily' does not mean majority of the sales; what it means is that price should not be exceptional. In our considered opinion, the word 'ordinarily', by no stretch of imagination, can include extra-ordinary or unusual. In the instant cases, as we have already noticed, the assessees sell their cars in the market continuously for a period of five years at a loss price and claims that it had to do only to compete with the other manufacturers of cars and also to penetrate the market. If such sales are taken as sales made in the ordinary course, it would be anathema for the expression 'ordinarily sold'. There could be instances where a manufacturer may sell his goods at a price less than the cost of manufacturing and manufacturing profit, when the company wants to switch over its business for any other manufacturing activity, it could also be where the manufacturer has goods which could not be sold within a reasonable time. These instances are not exhaustive but only illustrative. In the instant cases, since the price charged for the sale of cars is exceptional, we cannot

37 E/87501/2017,86049/2018,85181/2019 accept the submission of the learned counsel to give a meaning which does not fit into the meaning of the expression 'ordinarily sold'. In other words, in the transaction under consideration, the goods are sold below the manufacturing cost and manufacturing profit. Therefore, in our view, such sales may be disregarded as not being done in the ordinary course of sale or trade. In our view, for the purpose of Section 4(1)(a) all that has to be seen is : does the sale price at the factory gate represent the wholesale cash price. If the price charged to the purchaser at the factory gate is fair and reasonable and has been arrived at only on purely commercial basis, then that should represent the wholesale cash price under Section 4(1)(a) of the Act. This is the price which has been charged by the manufacturer from the wholesale purchaser or sole distributor. What has to be seen is that the sale made at arms length and in the usual course of business, if it is not made at arms length or in the usual course of business, then that will not be real value of the goods. The value to be adopted for the purpose of assessment to duty is not the price at which the manufacturer actually sells the goods at his sale depots or the price at which goods are sold by the dealers to the customers, but a fictional price contemplated by the section. This Court in Raj Kumar Knitting Mills case (supra), while construing the said expression, has held that the word 'ordinarily sold' do not refer to contract between the supplier and the importer, but, the prevailing price in the market on the date of importation and exportation. Excise duty is leviable on the value of goods as manufactured. That takes into account manufacturing cost and manufacturing profit."

Thus even Hon'ble Supreme Court has admitted the fact that "If the price charged to the purchaser at the factory gate is fair and reasonable and has been arrived at only on purely commercial basis, then that should represent the wholesale cash price under Section 4(1)(a) of the Act". Thus without rejecting the transaction value at which the goods are sold by the appellant in ordinary course of its business to its dealer purely on commercial consideration, revenue could not have proceeded to add any amount as additional consideration in the value for the payment of duty.

38 E/87501/2017,86049/2018,85181/2019 4.7 In order to clarify the position in this respect after the decision of the Hon'ble Apex Court in the case FIAT India Pvt Ltd, amendment were made to Rule 6 of the Valuation Rules vide Notification No. 20/2014-CE(NT) dated 11.7.2014, by inserting proviso as follows:

"Provided that where price is not the sole consideration for sale of such excisable goods and they are sold by the assessee at a price less than manufacturing cost and profit, and no additional consideration is flowing directly or indirectly from the buyer to such assessee, the value of such goods shall be deemed to be the transaction value."

Thus in view of amended Rule 6 and Circular dated 15.1.2014 we hold that the financial assistance received from holding company cannot be considered as additional consideration flowing from buyer and hence, not includible in the transaction value of the cars sold for paying excise duty.

4.8 Appellant in their submissions have referred to number of the case laws which support their case in view of the discussions as above we do not deem it necessary to consider the individual decision separately. Further as we do not find any merits in the issue for which these the demands have been made by the impugned orders, we are not taking up the issue on limitation and cum-duty price pleaded by the appellants.

4.9 As we are setting aside the demand on merits, the demand for interest and penalties also cannot be sustained.

5.1 Appeals are allowed.

(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) (Dr. Suvendu Kumar Pati) Member (Judicial) tvu

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