Benefit of Cum-Duty Pricing Applies when Invoice Price is Inclusive of Duty Payable or Paid, Regardless of Separate Duty Amount Disclosure in Invoice: CESTAT [Read Order]

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Chandigarh Bench, has held that the benefit of cum-duty pricing is applicable when the invoice price is inclusive of the duty payable or paid, regardless of whether the duty amount is separately disclosed in the invoice.

The decision came in response to an appeal filed by the revenue, Commissioner of Central Excise, Chandigarh against M/s. C.S. Zircon Private Limited.

The key issue before the CESTAT was whether the respondent company was eligible for cum-duty pricing, which essentially means that the excise duty is included in the invoice price.

The respondent, represented by Shri Gaurav Aggarwal and Shri Arun Mahajan, argued that they had shown the total assessable value in their invoices, which included the duty element, even though the duty amount was not separately disclosed.

The bench referenced a judgment of the Supreme Court in the case of Amrit Agros, emphasising that the onus is on the claimant to demonstrate that the price or value shown in the invoices is inclusive of the duty payable or paid, regardless of whether the duty is separately indicated.

The bench further stated that the principle laid down in Amrit Agros case, though rendered in the context of the un-amended Section 4 of the Central Excise Act, holds true for determining the cum-duty price.

The bench highlighted that the focus should be on whether the price charged to customers contains both a profit element and a duty element.

The respondent stated that they had provided invoices where the total assessable value was displayed along with other charges like CST/GST and freight.

The bench recognised that the cumulative invoice value indeed included the excise duty, even though it was not explicitly mentioned.

The appellant revenue, Commissioner of Central Excise, Chandigarh, represented by Shri Aneesh Dewan, argued that since they had availed an exemption, the decision in Bata India Limited's case shall be applied.

The bench clarified that the mere availing of an exemption does not automatically disqualify a manufacturer from applying cum-duty pricing. Instead, it should be evaluated on a case-by-case basis, taking into account the specifics of the invoices and the overall circumstances.

In this case, the respondent had provided invoices that showed a total invoice value inclusive of CST/GST and freight charges, implying that the CENVAT duty was not paid or recovered.

As a result, the tribunal upheld that the benefit of cum-duty was available to the respondent.

To Read the full text of the Order CLICK HERE

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