1997 (5) TMI 207 - AT - Central Excise

Appellate Tribunal allows appeal, excludes rental & transport charges from assessable value under Notification No. 175/86

The Appellate Tribunal CEGAT, New Delhi allowed the appeal in part, setting aside the inclusion of rental charges for crates and transport charges for ... Valuation Issues:Challenge to Order-in-Original No. 9/89 dated 3-4-1989 passed by the Collector of Central Excise, Nagpur regarding duty concession under Notification No. 175/86 for aerated waters and Bisleri Soda. Dispute over inclusion of additional charges in assessable value leading to demand of differential duty and penalty. Interpretation of Supreme Court decisions on rental charges for cylinders and transport charges for return of empty crates.Analysis:The appeal before the Appellate Tribunal CEGAT, New Delhi contested the Order-in-Original No. 9/89 passed by the Collector of Central Excise, Nagpur, challenging the duty concession availed by the appellant under Notification No. 175/86 for aerated waters and Bisleri Soda. The appellant cleared goods during a specific period, paying duty as per the slab system of the notification based on filed price lists. Subsequent investigation revealed that the appellant was collecting additional charges from dealers, leading to a proposal for demand of differential duty and penalty due to the inclusion of these charges in the assessable value.The dispute primarily revolved around the inclusion of rental charges for crates, transport charges for empty crates, and other miscellaneous expenses in the assessable value. The appellant relied on Supreme Court decisions related to rental charges for cylinders in gas supply cases to argue against the inclusion of such charges in the assessable value of aerated waters. The Tribunal emphasized the need to follow Supreme Court precedents and rejected the adjudicating authority's decision to include rental and transport charges in the assessable value, ultimately setting aside the demand for differential duty and penalty.The Tribunal highlighted the distinction between the supply of cylinders in gas cases and bottles in aerated waters cases, emphasizing that rental charges for ancillary items should not be considered part of the assessable value. By applying the logic from Supreme Court decisions, the Tribunal concluded that rental charges for bottles and transport charges for empty crates should not be included in the assessable value, thereby overturning the Collector's decision and dropping the demand for differential duty and penalty.In conclusion, the appeal was allowed in part, with the Tribunal setting aside the inclusion of rental charges for crates and transport charges for empty crates in the assessable value. Given the significant reduction in the demand amount, the Tribunal found no justification for imposing a penalty and accordingly set it aside.