2015 (10) TMI 2064 - AT - Central Excise

Tribunal rejects Revenue's appeal, upholds exclusion of Tonner/Cylinder value in Liquid Chlorine assessable value.

Commissioner of Central Excise, Customs (Appeals) - Vadodara – ii Versus Gujarat Alkalies & Chemicals Ltd.

The Tribunal rejected all appeals filed by the Revenue, affirming that the amortized value of Tonner/Cylinder need not be included in the assessable value ... Valuation of goods - whether the amortized value of Tonner/Cylinder supplied to the respondent free of charge by the customer for filling the Liquid Chlorine manufactured by the respondent, is to be included in assessable value of goods Liquid Chorine cleared by the respondent to the customers. - Held that:- Commissioner (Appeals), in the impugned order had observed that the respondent while clearing Liquid chlorine manufactured by them to their customers in the tonners/cylinders supplied by the later and there is no allegations/findings that the conditions laid down under Section 4(1)(a) of the Central Excise Act 1944 had not been satisfied. Hence, that the ground taken by the Revenue in the appeal can not be sustained. The revenue also not placed any material on such allegations before the Tribunal. - Tribunal in the case of M/s Grasim Industries Ltd (2003 (12) TMI 101 - CESTAT, NEW DELHI) had referred the decision of the Hon’ble Supreme Court in the case of M/s Grasim Industries Ltd [2009 (7) TMI 155 - SUPREME COURT OF INDIA] . In the case of TCP Ltd (2007 (7) TMI 199 - CESTAT, CHENNAI) the issue involved is the inclusion of the packing charges in the assessable value of the cylinder supplied by the buyers, which is similar to in the present appeal. - No reason to interfere the orders of the Commissioner (Appeals). - Decided against Revenue. Issues involved:Whether the amortized value of Tonner/Cylinder supplied to the respondent free of charge by the customer should be included in the assessable value of goods Liquid Chlorine cleared by the respondent to the customers.Analysis:Issue 1: Inclusion of amortized value in assessable valueThe appeals were filed by the Revenue against the orders of Commissioner (Appeals) regarding the inclusion of the amortized value of Tonner/Cylinder in the assessable value of Liquid Chlorine cleared by the respondent. The Revenue contended that the price of Liquid Chlorine is not the sole consideration for the sale, as evidenced by the difference in pricing based on whether the tonners are supplied by the buyer or the assessee. However, the respondent argued that the Tribunal in previous cases had dismissed similar appeals by the Revenue. The Commissioner (Appeals) observed that the conditions under Section 4(1)(a) of the Central Excise Act 1944 had been satisfied by the respondent, and the Revenue failed to provide any material to support their allegations. The Tribunal referred to previous decisions where the inclusion of packaging material value was not required in the assessable value of goods, thereby supporting the respondent's position.Issue 2: Judicial precedents and decisionsThe Revenue relied on the decision of the Tribunal in the case of Grasim Industries Ltd Vs CCE, Indore and appealed to the Hon'ble Supreme Court, which referred the matter to a Larger Bench. The respondent cited cases where similar appeals were dismissed by the Tribunal. The Tribunal, in the case of M/s Grasim Industries Ltd, held that the testing charges for tonners were not includible in the assessable value of liquid Chlorine, as Chlorine was marketable as such, and testing was optional. The Tribunal also referenced the decision of the Hon'ble Supreme Court in the case of M/s Grasim Industries Ltd, emphasizing that charges for testing were not directly related to the sale of Chlorine.ConclusionAfter thorough consideration and analysis of the arguments presented by both parties and the relevant legal precedents, the Tribunal concluded that there was no basis to interfere with the orders of the Commissioner (Appeals). Therefore, all appeals filed by the Revenue were rejected, affirming the position that the amortized value of Tonner/Cylinder need not be included in the assessable value of Liquid Chlorine cleared by the respondent.