2017 (1) TMI 1386 - AT - Central Excise

Appellate Tribunal CESTAT rules interest on receivables not part of assessable value

The Appellate Tribunal CESTAT, Mumbai allowed the appeal, setting aside the impugned order disallowing the deduction for interest on receivables through ... Valuation - interest on receivables - whether Interest on receivables through cheque discounting is permissible deduction to arrive at the assessable value of the excisable goods sold by the appellant through their depot or not? - Held that: - The issue is squarely covered by this Tribunals following judgments in the appellants own case Cadbury India Limited Versus C.C.E., Indore [2015 (10) TMI 1949 - CESTAT NEW DELHI], where it was held that the cheque discounting charges are charged by the bank for discounting of cheques to cover for delay in realization of payments by up-country buyers. This is nothing but interest on receivable which in terms of the Apex Court judgment in case of Government of India Vs. Madras Rubber Factory Ltd., reported in [1995 (5) TMI 28 - SUPREME COURT OF INDIA] is not includible in the assessable value - the impugned order disallowing the deduction on account of interest on receivables through cheque discounting is not correct and legal - appeal allowed - decided in favor of appellant. Issues involved:Whether interest on receivables through cheque discounting is a permissible deduction to determine the assessable value of excisable goods sold by the appellant through their depot.Analysis:The Appellate Tribunal CESTAT, Mumbai addressed the issue of whether interest on receivables through cheque discounting can be deducted to calculate the assessable value of excisable goods sold by the appellant. The Tribunal considered previous judgments in the appellant's own case, including Cadbury India Ltd. Vs. CCE, Aurangabad Tribunal Order and Cadbury India Ltd Vs. CCE, Indore. The Tribunal referred to the Apex Court's ruling in the case of Government of India v. Madras Rubber Factory Ltd., which stated that interest on receivables is not includible in the assessable value. Additionally, the Tribunal cited the Apex Court's decision in the case of CCE, New Delhi v. Vikram Detergent Ltd., where it was held that bank charges are not part of the assessable value. The Tribunal concluded that the impugned order disallowing the deduction for interest on receivables through cheque discounting was incorrect and legally unsustainable based on the precedents cited.The Tribunal found that the impugned order disallowing the deduction for interest on receivables through cheque discounting was not in line with the legal principles established by previous judgments. Therefore, the Tribunal set aside the impugned order and allowed the appeal. The decision was made based on the interpretation of relevant legal precedents and the specific circumstances of the case. The judgment highlights the importance of consistent application of legal principles in determining the assessable value of goods for excise purposes.