The Appellant while selling goods charged the customers invoices for the price\u00a0\u00a0\u00a0\u00a0 of goods plus \u2018Dharmada\u2019, a charitable donation. Such Dharmada which was paid voluntarily by customers was accordingly credited to charity. Show Cause Notice was issued to the appellant claiming that Dharmada so collected forms a part of transaction value. Due to conflicting views in the cases CIT (Central) Delhi, New Delhi v. Bijli Cotton Mills (P) Ltd. Hathras, District Aligarh (1979) 1 SCC 496\u00a0 <\/em><\/strong>and Collector v. Panchmnkhi Engineering Works 2003 (158) ELT 550 (S.C.), Tata Iron & Steel Co. Ltd. v.\u00a0 Collector of Central Excise, Jamshedpur 2002 (146) ELT.\u00a0\u00a0\u00a0\u00a0\u00a0 3 (SC) <\/em><\/strong>the referred the matter to a Larger Bench in order to resolve the conflict\u00a0\u00a0\u00a0\u00a0\u00a0 on 29.07.2015.<\/p>\n \u00a0<\/p>\n Whether the Dharmada collected by the appellant which is clearly an optional payment made by the buyer can be regarded as part of the transaction value for\u00a0\u00a0 the sale of goods.<\/p>\n \u00a0<\/p>\n If an amount is paid at the time of the sale transaction for a purpose other than\u00a0\u00a0\u00a0 the price of the goods, it cannot form part\u00a0 of the transaction value.\u00a0 The Dharmada so paid, is not for the transaction of sale i.e. for the transfer of\u00a0 possession of goods and any payment made alongside such a transaction cannot be treated as consideration for the goods. The receipts on account of Dharmada were voluntary, earmarked for charity and in fact credited as such. Furthermore, it would make\u00a0\u00a0\u00a0\u00a0 no difference to the true character and nature of the receipts even if they were found to be paid compulsorily because the purchaser, purchased the goods out\u00a0\u00a0\u00a0 \u00a0of their own volition, choice and will. The purchase of the goods is the occasion and not consideration for the Dharmada paid by the customer. Dharmada so paid,\u00a0 ismeant for charity and is received and held in trust by the seller.<\/p>\n \u00a0<\/p>\n If such amounts are meant to be credited to charity and do not form part of\u00a0\u00a0\u00a0\u00a0\u00a0 the income of the assessee they cannot be included in the transaction value or assessable value of the goods. Thus, Dharmada collected by the appellant which\u00a0\u00a0\u00a0 is clearly an optional payment made by the buyer can not be regarded as part<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n of\u00a0 the transaction value for the sale of goods. (CA\u00a0 No. 5282 of\u00a0 2005 and 531\u00a0 \u00a0of 2008 dt. 9-4-2019)<\/p>\n Editorial<\/em><\/strong>: Section 15 provides for value (transaction value) of supply of goods and services. Hence, according to me, the ratio of the above ruling would continue to hold good and apply even under the GST regime in as much as \u2018the price actually paid or payable for the said supply of goods or services or both\u2019 alone would form part of value. Compulsory extraction would not form a part of value.<\/p>\n \u201cThere is a higher court than courts of justice\u00a0\u00a0\u00a0 and that is the court of conscience. It supersedes all\u00a0 other courts.<\/em><\/p>\n – Mahatma Gandhi<\/p>\n","protected":false},"excerpt":{"rendered":" Central Excise Act, 1944Issue<\/h3>\n
View<\/h3>\n
Held<\/h3>\n
\nS. 4: Valuation of excisable goods for purpose of charging of duty of excise \u2013 Valuation \u2013 Dharmada collected along with the price of goods \u2013 Not a part of transaction value<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":["post-12985","post","type-post","status-publish","format-standard","hentry","category-gst-law"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3nr","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=12985"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12985\/revisions"}],"predecessor-version":[{"id":12986,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/12985\/revisions\/12986"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=12985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=12985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=12985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}