1988 (7) TMI 229 - AT - Central Excise

Exclusion of Rental Charges in Excise Duty Calculation Remanded for Re-calculation

The Tribunal set aside the inclusion of rental charges in the assessable value for Central Excise duty calculation but remanded the matter for a detailed ... Valuation Issues:1. Assessment of transportation charges and rental charges in the assessable value for Central Excise duty calculation.Analysis:The case involved an appeal by a company manufacturing aerated water against the assessment order passed by the Collector of Central Excise. The company had collected various sums through debit notes during a specific period. The main contention was regarding the inclusion of transportation charges and rental charges in the assessable value for Central Excise duty calculation. The Assistant Collector had initially disallowed certain deductions claimed by the company, leading to subsequent appeals and re-adjudication.The company argued that certain expenses like transportation charges and octroi paid should be deducted from the amounts collected on debit notes to arrive at the assessable value, citing legal provisions and court judgments. The Assistant Collector allowed deductions for octroi charges but disallowed deductions for transportation charges related to the collection of empty bottles, leading to a demand for Central Excise duty.The Collector (Appeals) upheld the decision on rental charges but remanded the matter for recalculation of transportation charges for the return journey and correcting calculation errors. The subsequent re-adjudication by the Assistant Collector resulted in a demand for Central Excise duty, which was appealed by the company.During the hearing before the Tribunal, arguments were presented by the company's advocates and the Revenue's representative. The Tribunal analyzed the facts and circumstances of the case, focusing on the rental charges and transportation charges for the return journey of bottles. The Tribunal referred to relevant legal precedents and directed the re-computation of transport charges for the return journeys based on actual payments made by the company. The Tribunal emphasized the need for genuine evidence and records to support the claimed deductions.Ultimately, the Tribunal set aside the inclusion of rental charges in the assessable value but remanded the matter to the Assistant Collector for a detailed re-calculation of transportation charges for the return journey of bottles. The Tribunal instructed the Assistant Collector to verify the authenticity of the evidence provided by the company and to consider actual payments made while determining the assessable value. Both appeals were disposed of with these directions.