CBEC LETTER, DT. 14/09/2005

Transfer of Advance Licence by buyer in favour of seller of goods enabling him to import duty-free raw materials and bring down cost of production/procurement-benefit accrued on this account including in assessable value as per Apex Court judgment in the case of CCE Bhubaneshwar-II Vs. M/s. IFGL Refractories Ltd.

I am directed to draw your kind attention towards judgment of Hon"ble Supreme Court in the case of CCE, Bhubaneshwar-II Vs. IFGL Refractories Ltd. reported by Taxindia Online (2005 TIOL-103-SC-CX) wherein it has been held that surrendering of advance licence in favour of the supplier of goods amounts to flow of additional consideration from buyer to seller [copy enclosed]. It is pertinent to mention that the ratio of this judgement is valid for both old and new Section 4.

2. You are requested to decide all pending disputes accordingly and to also ensure that necessary Notices are issued in all such cases to safeguard government revenue.

Yours faithfully,

(Abhai Kumar Srivastav)
Deputy Secretary (CX.I)

F.No. 6/3/2005-CX.I

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