Case Law Details
M/s D. J. Malpani Vs Commissioner of Central Excise (Supreme Court of India)
Conclusion: When an amount was paid as Dharmada along with the sale price of goods, such payment was not made in consideration of the transfer of goods but for charity, therefore, the same did not form part of the income of assessee and could not be included in the transaction value or assessable value of the goods.
Held: Assessee manufactured Pig Iron and HR Coil Sheets falling under Chapter 72 of The Central Excise Tariff Act, 1985. While selling the goods they raised invoices on the price of goods plus ‘Dharmada’ a charitable donation from customers. According to assessee, the Dharmada was meant for charity and was accordingly credited to charity. Lower authorities held that Dharmada should be added to the assessable value. Therefore, the goods were liable to be assessed on the basis of their price plus Dharmada. It was held when an amount was paid as Dharmada along with the sale price of goods, such payment was not made in consideration of the transfer of goods. Such payment was meant for charity and was received and held in trust by the seller. If such amounts were meant to be credited to charity and did not form part of the income of assessee they could not be included in the transaction value or assessable value of the goods.
FULL TEXT OF THE SUPREME COURT JUDGMENT
The appellant-assessee manufacture goods falling under Chapter 24 of the Schedule of The Central Excise Act, 1944 (hereinafter referred to as “the Act”). While selling goods, the appellant-assessee charged the customers invoices for the price of goods plus Dharmada, a charitable donation. According to the appellant, the Dharmada was paid voluntarily by customers and was meant for charity. It was accordingly credited to charity.
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