1997 (12) TMI 337 - AT - Central Excise

Tribunal Remands Case for Recalculation: Precedents Support Appellant's Additional Amount Claim

The Tribunal remanded the case to the adjudicating authority for reconsideration. The appellant's request to treat the additional amount as part of the ... Valuation - Demand - Reopening of assessment Issues Involved:1. Whether the additional amount recovered by the appellant should be treated as part of the cum-duty price.2. Whether the turnover tax and additional sales tax paid to the State Government should be deducted from the total assessable value.Summary:Issue 1: Treatment of Additional Amount as Cum-Duty PriceThe appellant contended that the additional amount recovered should be treated as part of the cum-duty price, and the assessable value should be recalculated by deducting the duty element. The Tribunal referenced precedents such as Pawan Tyres Pvt. Ltd., Geep Industrial Syndicate Ltd., and Krishna Industrial Chemicals Ltd., which supported the view that the excess amount realized by the manufacturer should be treated as cum-duty price. The Tribunal concluded that the matter needs to be reconsidered by the adjudicating authority to determine the correct assessable value by deducting the duty element from the cum-duty price.Issue 2: Deduction of Turnover Tax and Additional Sales TaxThe appellant argued that the turnover tax and additional sales tax paid to the Maharashtra State Government, which were not recovered from dealers, should be deducted from the total assessable value. The Department opposed this, stating that the demand made is a short-levy duty demand u/s 11A of the Central Excise Act, 1944, and the show cause notice did not reopen the entire assessment but only part of it. The Tribunal referenced cases like Krishna Industrial Chemicals Ltd., Lili Foam Industries Pvt. Ltd., and Bakeman's Home Products Pvt. Ltd., which supported the appellant's right to claim deductions for taxes paid even if not claimed earlier. The Tribunal held that the correct assessable value must be determined by considering legitimate deductions as per Section 4 of the Central Excise Act, 1944.Conclusion:The Tribunal set aside the impugned order and remanded the case to the jurisdictional adjudicating authority for a fresh decision in accordance with the law and the findings and directions in this order. The appeal was allowed to the extent indicated, emphasizing the need for recalculating the assessable value and differential duty by treating the additional amount as cum-duty price and considering the deductions for turnover tax and additional sales tax.