In Brief
A manufacturing company received advance payments from major customers (Coca Cola India and Pepsico India Holdings) and offered them a 3-4% discount. The revenue department claimed the notional interest earned on these advances should be added to the assessable value of goods under excise law. The Supreme Court held that inclusion of notional interest depends on proof that the advance caused the sale price to be depressed. The onus to establish this nexus lies on the revenue. The Court remitted the matter to the tribunal for fresh examination of whether the advances affected pricing, leaving the penalty question open for reconsideration."
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