2017 (7) TMI 486 - AT - Central Excise

High Court Upholds Order on Post-Manufacturing Deductions and Abatements

The Hon'ble High Court upheld the original authority's order directing deductions for post manufacturing expenses and abatements towards freight, durable, ... Abatements on durable and returnable containers - Held that: - the Commissioner (Appeals) has given a detailed discussion as to how the original authority has granted abatement. Ld. Counsel for the respondent has explained that for the metal containers which were returned, the refund paid by them was ₹ 5.50 and ₹ 5, whereas the price of such containers was ₹ 8.03 and ₹ 6.88. The department contends that the respondents are eligible only on the amount that is refunded and not on the price declared in the price list. This grievance of the department has been answered by the adjudicating authority - there is no ground to interfere with the quantification of abatement on durable and metal containers made by the authorities below - appeal dismissed - decided against Revenue. Issues involved:1. Claiming deductions from assessable value for post manufacturing expenses.2. Abatements towards freight, durable and returnable containers.3. Disallowance of abatement claimed for post manufacturing expenses.4. Refund of metal containers and quantification errors.5. Appeal against the Tribunal's order remanding the matter.6. Interpretation of abatements on durable and returnable containers.Issue 1: Claiming deductions from assessable value for post manufacturing expenses:The respondents filed a price list claiming deductions for post manufacturing expenses. The Commissioner (Appeals) allowed abatements towards freight and durable and returnable containers but directed the original authority to quantify such abatements. The Hon'ble High Court directed the original authority to act in accordance with the Commissioner (Appeals) decision. The Assistant Collector computed the differential duty, adjusting it against the predeposit made by the assessee. The department appealed the order before the Tribunal, which remanded the matter to the Commissioner (Appeals) who upheld the original authority's order.Issue 2: Abatements towards freight, durable and returnable containers:The department argued that the original authority erroneously allowed abatements on durable and returnable containers, not considering the provision for the refund of metal containers in the price list. The department contended that the quantification was erroneous. The respondents explained that they had refunded a specific amount for metallic returnable containers, which was declared in the price list. The Commissioner (Appeals) compared prices and found them to be the same, addressing the grievance raised by the respondents.Issue 3: Disallowance of abatement claimed for post manufacturing expenses:The department raised concerns about the abatements granted by the original authority on durable and returnable containers. The Commissioner (Appeals) provided a detailed discussion on how abatements were granted. The department's grievance regarding the amount refunded for metal containers versus the declared price in the price list was addressed by the adjudicating authority. The Commissioner (Appeals) re-determined the duty based on the impugned order-in-original, finding no grounds to interfere with the quantification of abatements on durable and metal containers.Issue 4: Refund of metal containers and quantification errors:The department highlighted discrepancies in the quantification of abatements on metal containers. The respondents explained the refund amounts for metallic returnable containers and how the price declared in the price list matched that of corresponding dealers. The Tribunal found no grounds to interfere with the quantification of abatements on durable and metal containers, ultimately dismissing the appeal filed by the Revenue.Issue 5: Appeal against the Tribunal's order remanding the matter:The department appealed the Tribunal's decision remanding the matter to the Commissioner (Appeals). Despite the remand, the Commissioner (Appeals) upheld the original authority's order regarding abatements on durable and returnable containers, leading to the department's further appeal before the Tribunal.Issue 6: Interpretation of abatements on durable and returnable containers:The Tribunal analyzed the arguments presented by both sides regarding abatements on durable and returnable containers. The Commissioner (Appeals) detailed the basis for granting abatements, addressing the department's concerns about the refund amounts for metal containers. The Tribunal found no grounds to interfere with the quantification of abatements, leading to the dismissal of the Revenue's appeal.This comprehensive analysis covers the key issues and the Tribunal's decision on each aspect of the case, providing a detailed understanding of the judgment.