1996 (1) TMI 184 - AT - Central Excise

Tribunal remands soft drink assessable value case, sets aside penalty, directs price adjustment.

The Tribunal set aside the impugned order and remanded the case for a reevaluation of the assessable value of soft drinks manufactured by the appellant. ... Valuation Issues:Determining assessable value for soft drinks manufactured by the appellant for the period from May 1979 to November 1979.Analysis:The appellant, a manufacturer of soft drinks, submitted price lists showing a certain price per crate for campa cola, campa orange, and lemon, which were provisionally approved. Subsequently, it was found that the appellant was collecting higher prices for these products. The Assistant Collector issued a notice to show cause why the higher prices should not be accepted as the basis for determining the assessable value. The adjudicating authority confirmed a demand of Rs. 64,531 based on the higher prices charged by the appellant.The appellant argued that the higher amount collected was for the cost incurred in transporting the goods to the shops of wholesalers or dealers, which should be excluded from the assessable value if factually correct. The statements of various customers revealed that while some paid higher prices that included transport costs borne by the appellant, others arranged their own transport. It was established that the appellant collected only the declared prices from customers who arranged their own transport, while collecting higher prices from others, with a substantial part of the difference attributable to transport costs.The show cause notice indicated that the declared price did not include handling, forwarding, freight, and supervision charges. It was determined that charges for handling and supervision at the factory premises should be included in the assessable value, while transportation and unloading charges should be excluded. Due to the lack of precise material on these expenses, the Tribunal estimated that 75% of the difference in prices was related to unloading and transport charges. Consequently, the Tribunal directed the modification of the value by deducting 75% of the difference between declared and higher prices, remanding the case for a fresh determination of assessable value and excise duty payable.In conclusion, the impugned order was set aside, and the case was remanded for a reevaluation of the assessable value, with the penalty levied being set aside due to the circumstances of the case being nearly 16 years old and the lack of available material for a proper decision.