TaxTMI 
TaxTMI 
TaxTMI 
1991 (10) TMI 141
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....ed Acetylene gas. Excise duty was imposed on the dissolved Acetylene gas with effect from 18th June, 1977 under Tariff Item 14H. The assessee had filed the price list No. 16/HGI(P)/DA/82-83 dated 24th February, 1983 effective from 24th February, 1983 in Part VII. Basic duty payable was at 15%, special duty at 5% and the price inclusive of excise duty to M/s. Shribajrang Electrical and Steel Co. Ltd., 1, Kali Majumdar Road, Howrah was also declared. In column No. 3, the price has been mentioned at Rs. 53.00 and the value has been claimed at Rs. 33.85. After claiming a deduction of 29% on account of post-manufacturing expenses and selling profits, the revenue had assessed the value at Rs. 45.56. The Superintendent of Central Excise, Calcutta had approved the same on 12th September, 1986 in the light of the Assistant Collector of Central Excise, Calcutta, XVI Division, A/o No. 14/PL/83 dated 21st December, 1983 with the benefit of 1/2% turnover tax. 2. Being not satisfied with the order passed by the Superintendent, an appeal was filed before the Collector of Central Excise (Appeals), Calcutta. The Collector of Central Excise (Appeals) has disposed of 9 appeals by a common order. Bef....
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...., surcharge on sales tax and turnover tax from the sale price to arrive at-the assessable value, if these taxes were proved to have been paid. The Collector of Central Excise (Appeals), Calcutta had further observed that in the present matter the fact being that the assessee had paid turnover tax @ 50% only, the Superintendent of Central Excise was justified in approving the price lists after allowing a deduction @ 1/2% towards turnover tax and so the orders so far relating to the issue of turnover tax merit for endorsement. The Collector (Appeals) had observed that the assessee's earlier appeals on the identical issue stood decided on the same line. On the issue of allowing deduction @ rupee 1.00 per cubic metre towards cost of cylinders which were of durable nature and returnable, the Collector (Appeals) had observed that Section 4(4)(d)(i) ibid permits exclusion of charges on such durable and returnable containers. In the instant case, gases were supplied in cylinders of durable nature. The assessee had contended that those cylinders were returnable by the customers in terms of the contract therefor. If that being the fact, on document basis it was proved that the cylinders had....
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....appellant from its customers included interest for the period of credit availed by the buyers and as such the same had to be excluded from the price of the goods in order to arrive at the normal price thereof under Section 4 of the Central Excises and Salt Act, 1944." 5. Shri V. Lakshmi Kumaran, the learned advocate has appeared on behalf of the assessee. He has reiterated the facts. Shri Lakshmi Kumaran has argued that the assessee had claimed deduction of 29% of the post-manufacturing expenses from the assessable value of the price lists and a deduction of rupee 1.00 per cubic metre as cylinder maintenance cost proportionately has also been claimed. He further argued that further deductions in view of the decision of the Supreme Court in the case of Union of India v. Bombay Tyre International and Others reported in 1983 (14) E.L.T. 1896 should be allowed and laid special emphasis on the following :- (i) Taxes viz. sales tax and turnover tax. (ii) Interest on receivables. (iii) Distribution expenses. (iv) Freight actual. For his claim for deduction on account of interest on receivables, he relied on earlier decision of the Tribunal in the assessee's own case in order No. 126....
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.....T. 725 (Tribunal) where the Tribunal had held that "Valuation - Gas Cylinders - All costs incurred for delivery of the goods at the factory gate includible in the assessable value - As such, cost of supervision, unloading acid loading charges of Rs. 2/- per cylinder not excludible from the assessable value of cylinder. Valuation - Gas cylinder being a durable container some cost would be incurred for its maintenance during its life period - As such, not only initial purchase price of the cylinder but also charges incurred on its essential repairs, maintenance and testing are excludible from the assessable value of cylinder" and the Assistant Collector was directed to go into the costing of the testing and maintenance charges and determine the actual cost therefor with a margin of profit (Paras 7, 8 and 9). Shri Lakshmi Kumaran in support of his argument for deduction on account of turnover tax also referred to Section 4(4)(d)(ii) of the Central Excises and Salt Act, 1944. He argued that turnover tax is on finished goods. He pleaded that the assessee had paid 50% as per direction of the Calcutta High Court and remaining 50% is also to be paid. He referred to the following decisions....
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....in the above appeals. To this direction the assessee's advocate has filed the Chart annexure 'I' to this order. We have examined at length the arguments advanced by both the sides. In the appeals filed by the revenue, the only claim is as to the deduction of proportionate cost of cylinders at the rate of rupee 1.00 per cubic metre and in some matters interest on receivables, whereas in the appeals filed by the assessee the dispute is in respect of the allowance of deduction of turnover tax to be allowed in full instead of 50% allowed by the lower authorities, cost of distribution at duty paid retail sales depot, interest on receivables and proportionate cost of cylinders @ rupee 1.00 per cubic metre. As earlier reproduced above the claim of interest on receivables in the assessable value was not made before the lower authorities. It has been made before the Tribunal for the first time. There is no bar for raising a fresh plea before the Tribunal on the basis of the material already available on record. It was so observed by the Andhra Pradesh High Court in the case of CIT v. Gangappa Cables reported in 116 ITR 778. Similar were the observations of the Patna High Court in the case o....
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....primary packing and as not extending to secondary packing. The heads under which the claim to deduction is made are detailed below :- (1) Storage charges. (2) Freight or other transport charges, whether specific or equalised. (3) Outward handling charges, whether specific or equalised. (4) Interest on inventories (stocks carried by the manufacturer after clearance). (5) Charges for other services after delivery to the buyer. (6) Insurance after the goods have left the factory gate. (7) Packing charges. (8) Marketing and Selling Organisation expenses, including advertisement and publicity expenses. 49. We shall now examine the claim. It is apparent that for purposes of determining the "value", broadly speaking both the old S. 4(a) and the new S. 4(l)(a) speak of the price for sale in the course of wholesale trade of an article for delivery at the time and place of removal, namely, the factory gate. Where the price contemplated under the old S. 4(a) or under the new S. 4(l)(a) is not ascertainable, the price is determined under the old S. 4(b) or the new S. 4(l)(b). Now, the price of an article is related to its value (using this term in a general sense), and into that value....
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....used to get their supplies through the cylinders of the suppliers. According to him, different rates for these two classes of buyers, in fact, constitute two different markets and are permissible. This, according to him, is contemplated under the first proviso to Section 4(1)(a) of the Act, which reads as follows : "(i) where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall, subject to the existence of the other circumstances specified in clause (a), be deemed to be the normal price of such goods in relation to each class of buyers." There may be different classes of buyers for different classes of goods. Section 4(l)(a) of the Act emphasises that if the goods is of the same type, the prices should also be the same. The proviso/to the said section postulates that where in accordance with normal practice such goods, namely, the gases are sold to different classes of buyers then different prices may be charged. If gases had been sold to different classes of buyers at different rates, it is possible that there might be ....
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....hat 'interest on receivables' cannot be included in the assessable value. Further the decision cited (supra) also supports this view although Supreme Court has dealt with old Section 4 (i.e., prior to amendment) in Voltas case cited (supra), the observation made by the Supreme Court is relevant on this issue even under new Section 4 of the Act as there is no material change while determining the assessable value. The relevant portion of the observations by the Hon'ble Supreme Court in the above case is reproduced below :- "Excise is a tax on the production and manufacture of goods (see Union of India v. Delhi Cloth and General Mills - AIR 1963 SC 791 = 1977 (1) E.L.T. (J 199). Section 4 of the Act, therefore provides that the real value should be found after deducting the selling cost and selling profits and that the real value can include only the manufacturing cost and the manufacturing profit. The section makes it clear that excise is levied only on the amount representing the manufacturing cost plus the manufacturing profit and excludes post-manufacturing cost and the profit arising from post-manufacturing operation, namely selling profits. The Section postulates that the whol....