TaxTMI 
TaxTMI 
1997 (8) TMI 222
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.... by issue of show cause notice wherein it was alleged that the respondents with a view to pay lower duty had splitted out the value of the sale price showing the sale price as rental and maintenance charges. The respondents replied to the show cause notices and came before the authorities with pleas as to the claim of such charges as trade practice in this regard. While resisting the charges the respondents relied upon the decision in the case of Indian Oxygen Ltd. v. CCE reported in 1988 (36) E.L.T. 730 (S.C.). The three adjudicating authorities allowed the respondents' pleas made by them in regard to abatement as well as quantum of abatement claimed by them. The Revenue is aggrieved against this finding of the adjudicating authorities and in the grounds of appeals in the three appeals, they have urged as under : Appeal No. E/363/96-Md. : (1) Regarding the Commissioner's finding about the transport charges, rental and maintenance charges, it is noticed that he has relied upon case law in concluding that the cost of transportation and the charges on account of durable and returnable packing are not to be added to the declared value. It is submitted that he had only applied h....
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.... The HBC shall conduct physical verification of empty bottles and the cases at periodical intervals and if any shortfall on account of breakages or loss is found till that date, have to be compensated by the dealers; (iv) The dealers are authorised to collect and refund deposit for glass bottles and wooden cases in the market and issue debit and credit notes respectively. Commission at the rate of Rs. 2.50 per crate would be reimbursed by HBC for mobilising the deposits to each Hyderabad city dealer and Rs. 1.50 in respect of District dealers; (3) The dealers would be charged Rs. 0.60 per crate towards the advertisement expenses, on the total number of crates of soft drinks and soda purchased from HBC. (This condition is stated as not existing at present from 1-3-1994 and this activity of advertisement is entrusted to M/s. Vijaya Estates & Holdings (P) Ltd., Hyderabad, whose office for this purpose is situated in the building of HBC, wherein the factory is situated; vide exhibit AD 26 marked by Shri T.N. Swamy, Manager of the Advertising Company on 5-7-1994 while giving his statement). (4) The condition relating to the collection of bottle deposit by the deal....
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....enses and mis-stated the facts in an attempt to evade large amounts of excise duty legally payable by them and therefore, the decision of the Commissioner not to impose any penalty was not warranted. Even on the issue of advertisement expenses where the company had adopted the modus operandi of handing over the coordination work to M/s. Vijaya Estate Company in order to mislead the department, and keeping in view the large amount of revenue involved in the SCN, Commissioner should have imposed a penalty. Appeal No. E/V-586/96/Md. : (1) If the practice of collecting rentals was in vogue M/s. Sarvaraya Sugars Limited would have shown the same in their bills and considering the fact whether the goods were assessed to ad valorem duty or specific duty was immaterial. (2) The total invoice price to the wholesale dealer for the aerated waters/soda has been discussed in detail for the months of Feb., 1994, March, 1994 (1-3-1994 to 20-3-1994) and from 24-8-1994 onwards which clearly bring to light that the net wholesale price to the dealer remains constant and the assessable values were reduced on account of extra collections either in the name of Advertisement/Sale Promotion e....
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....ee in order to facilitate the extra collections to be made in the form of rentals by keeping the end price constant and this was not discussed by the Commissioner in Order-in-Original before coming to the conclusion that the same represents the actual rental charges. (7) The rentals and the interest free container deposits being received from the dealer cannot go together, this aspect was not taken into account by the Commissioner while deciding the issue on rentals. When the Commissioner accepted the concept of rentals he has not taken into account the interest free deposits received from the dealers towards container deposit to the tune of rupees one crore, which was an additional consideration when the goods were being assessed ad valorem from 1-3-1994. M/s Sarvaraya Sugars Ltd., have admitted in their statement that the container deposit amount was being invested by them for purchase of bottles and crates. Appeal No. E/1326/96/Md. : (2) While dropping the demand the Commissioner had relied upon the decision of Supreme Court in the case of M/s. Indian Oxygen Ltd. The Commissioner relied in this regard inasmuch as the ratio of judgment of M/s. Indian Oxygen Ltd., can....
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....dents for rentals and maintenance charges. 3. The learned DRs after perusal of the judgment of the Hon'ble Supreme Court referred to above, and also the decision of the 3-Member Bench of the Tribunal in the case of Steel City Beverages Pvt. Ltd. v. CCE reported in 1994 (72) E.L.T. 80 (Tribunal) and the various other orders in this regard and also the latest decision of the first bench of the Tribunal in the case of 1997 (95) E.L.T. 356 (Tribunal) = 1997 (71) ECR 552 fairly conceded the position that so far as the settled position in law as emerged is that the rentals and maintenance charges in principles are permissible abatement. 4. Arguing on the quantum of abatement as allowed by the adjudicating authorities, it has been urged that the authorities have not discussed in detail as to how these charges were worked out and how the same quantity as claimed can be reckoned towards rentals and maintenance charges. They have also urged that some deposits were also taken for the crates and bottles i.e. Rs. 100/- per crate. Accrual of interest on the deposits would have compensated the respondents in respect of rentals and maintenance charges. Therefore, they pleaded that ther....
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....ents have urged that proceedings were initiated by issue of show cause notices wherein after taking note of the abatement which the respondents have taken, charges were framed against the respondents to show cause as to why and how for the payment of duty, split value of aerated waters is shown and abatement claimed towards maintenance and rentals. They have pleaded that the authorities have taken note of the quantum of abatement taken by them and did not call for any information from them as to the basis of the abatement and proceeded to frame charges for the purpose of disallowing permissible abatement. He has pleaded that there are catena of case law which are cited by them including that of the Hon'ble Supreme Court in the case of Indian Oxygen Ltd. reported in 1988 (36) E.L.T. 730 followed by another 3-Member decision of the Tribunal in the case reported in 1988 (38) E.L.T. 42 to show that the respondents had in their invoice taken permissible abatement and they have come on record as to the quantum which were abatable for maintenance and rental charges. The authorities have culled out information from them and if the authorities had felt that the information were not correctl....
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....hereof are not challenged before us in the appeals filed by the department. On the contrary, on a perusal of the appeals filed by the department it is vaguely stated that no rental charges are incurred by the assessees. The department has not furnished any material to show that the respondents have not incurred any such expenditure towards rentals and maintenance. In these cases on the contrary, during investigation into the facts the authorities did not require the respondents to furnish details about their rental and maintenance which were incurred by them. It is only after such investigation done by the department that the respondents filed the details in that regard. At that time the department did not stated that rentals were not incurred by the respondents. On the contrary, the evidence produced by the respondents in the shape of Chartered Accountant's certificate have been looked into by the adjudicating authority and after consideration of the same, these were accepted by the adjudicating authority. This finding of the adjudicating authority not having been challenged in the grounds of appeal the plea raised by the learned DRs that there was no such charges incurred by the ....