In terms of the aforesaid detailed worksheets i.e "Annexures A",

I

finalize

the

provisional

assessment

for

the

products

"Transformers (56 Nos) cleared during the period April, 2010 to

March, 2011, under the provisions of Rule 7(3) of Central Excise,

Rules, 2002.

I demand and order for recovery of the duty totally of

Rs.22,44,14,353/-

(BEDRs.21,78,78,007+EdCess43,57,561/-

+SHEcessRs.21,78,885/-) paid by the assessee provisionally

during the year 2010-2011, and confirm the same under Section

11A of the Central Excise Act, 1944 read with para 2.6 of Pt. IV

of Chapter 3 of CBEC Excise Manual of Supplementary

Instructions 2005.

I

appropriate

the

amount

totaling

to

Rs.22,44,14,353/-

(BEDRs.21,78,78,007+EdCess43,57,581/+SHEcessRs.21.78,885

/-) paid by the assessee as per Annexure 'A'.

I demand and order for recovery of the duty of Rs. 45.30 arised

due to calculation error under Section 11A of the Central Excise

Act., 1944, which should be paid forthwith.

I order for recovery of interest of Rs. 16,48,461/-, under Rule

7(4) of Central Excise Rules, 2002, read with then Section 11AA

of Central Excise Act, 1944, as per Annexure 'A', which should be

paid forthwith.”

3

2.1

Appellant

is

engaged

in

manufacture

of

power

transformers which they clear to their customers on the basis of

ex work price quoted by them while filing the tender documents.

As these are contracts for large transformers, there is wide gap

between the date when they have filled the tender for supply of

these goods and actual supply and finalization of the supplies as

per the contract. For the reasons of time gap there is a price

variation between the price quoted and the actual price at which

the goods are supplied, namely for the reason of fluctuation in

prices of raw materials/components viz. copper wire, bars, CRGO

coils, transformer oil, etc. used in the manufacture of

transformers during the final supply of the product.

2.2

For the reason that the appellant was unable to determine

the prices finally at the time of the clearance of the goods from

their factory premises. Assessments for the period April 2010 to

March 2011 were made provisionally.

2.3

In

order

to

protect

the

interest

of

transformer

manufacturers, the Indian transformer manufacturers have

formed an organization viz. Indian Electrical and Electronics

Manufacturers Association (IEEMA). IEEMA adopted price

variation clause to take care of the price variation in raw

material component parts used in manufacture of power

transformers and accordingly designed formula to work out the

exact price variation in the contracted ex-works fixed for supply

of power transformers. This formula has been accepted and

incorporated in the consent letter between the buyer and the

supplier.

2.4

According to the above formula as prescribed for IEEMA,

the contracting parties finalized the price over and above the ex-

works price declared at the time of filing the tender in the case

of each and every buyer. In the case of division of the price

appellant issued supplementary invoices to their customers and

duty is discharged on the said additional prices so determined.

Assessable value of the said goods is finalized only on receipt of

final working price variation for transformers cleared by them.

4

2.5

Jurisdictional

Assistant

Commissioner,

after

taking

verification report from range Superintendent finalized the

assessment as per order indicated in para 1.2 above, as

reproduced below:-

“i)

During the period of Provisional Assessment le April 2010

to March 2011 under the IEEMA PVC there is upward revision of

price for which supplementary invoices are issued.

ii)

The assessee vide their letter dt. 27.07.12 submitted the

statement

along

with

copies

of

Original

invoices

and

Supplementary Invoices wherein there is Price variation clause is

involved for the period April 2010 to March 2011. There are 90

Invoices of original clearances in respect of transformers and

correspondingly only 87 supplementary invoices have been

issued as