Tribunal grants relief in appeal over transportation subsidy deduction dispute. Manufacturers in North-East Region benefit.

The Tribunal allowed the appeal of the appellants regarding the disallowance of average freight deduction by the Assistant Commissioner. The Tribunal held that the subsidy received by the manufacturers on transportation costs should not reduce the actual cost of transportation claimed, as it is an incentive for manufacturers in the North-East Region. The Tribunal distinguished the case from previous judgments cited by the Department, emphasizing that the subsidy did not warrant a reduction in transportation costs. Consequently, the appellants were granted relief in their appeal.

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Issues:
- Disallowance of average freight deduction by Assistant Commissioner.
- Interpretation of Section 4(2) of Central Excise Act regarding exclusion of transportation cost from price.
- Applicability of subsidy received by manufacturers on transportation cost.
- Comparison with previous Tribunal judgments and Supreme Court decisions.

Disallowed Average Freight Deduction:
The appellants filed price-lists for approval of assessable value but were denied deduction of average freight by the Assistant Commissioner. The lower appellate authority suggested allowing the deduction based on actual transport costs incurred and subtracting the subsidy received for transportation of goods outside the North-East Region. The appellants appealed against this finding.

Interpretation of Section 4(2) of Central Excise Act:
The appellant argued that reducing the average cost of freight by the subsidy received is not supported by Section 4(2) of the Central Excise Act. They contended that the cost of transportation should not be reduced by the subsidy, as it is an incentive for manufacturers in the North-East Region. The Department, however, asserted that the actual cost of transportation, minus the subsidy, should be excluded from the price of goods.

Applicability of Subsidy on Transportation Cost:
The Department argued that the subsidy received should reduce the actual cost of transportation, regardless of when it was received, as the manufacturer has a vested right in obtaining the subsidy. They relied on a Tribunal judgment and Supreme Court decisions to support their position.

Comparison with Previous Tribunal Judgments and Supreme Court Decisions:
The Tribunal analyzed the submissions and concluded that the cost of transportation claimed by the appellants had been actually incurred. They noted that the subsidy received by the manufacturers from the Central Government did not warrant a reduction in the transportation cost. The Tribunal distinguished the present case from the precedent cited by the Department, as the cost of transportation was not disputed. Therefore, the appeal of the appellants was allowed with consequential reliefs.

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