Case Law Details
PGP Glass Private Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
Introduction: The recent ruling by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Ahmedabad in the case between PGP Glass Private Limited and the Commissioner of Central Excise & ST sheds light on the complexities surrounding the assessment of goods, especially in the context of export. The crux of the case revolves around whether mould charges collected by PGP Glass should be considered as an additional consideration that forms part of the transaction value under Section 4 of the Central Excise Act, 1944.
The Bone of Contention: Mould Charges: The core issue in this case was whether the mould charges collected by PGP Glass Pvt. Ltd. from their customers should be treated as an additional consideration that would thus be part of the transaction value for calculating Central Excise Duty. The department contended that these charges should indeed be counted, citing Section 4 of the Central Excise Act, 1944.
Revenue Neutrality: A Counterargument: PGP Glass, represented by Chartered Accountant Shri Mehul Jivani, argued that the case was “Revenue neutral.” They explained that since the exported goods would have qualified for a duty refund, there would be no loss of Revenue to the government. They cited multiple case laws to support this argument, but it was ultimately rejected by the Tribunal.
Legal Framework: Section 4 and Rule 6: The Tribunal referred to Section 4 of the Central Excise Act, 1944, and Rule 6 of the Central Excise (Determination of Price of Excisable Goods) Rules, 2000, stating that the mould charges must be included in the assessable value of excisable goods. The Tribunal made it clear that the legally provided scheme of assessment must be followed, regardless of whether the goods are meant for export or domestic use.
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