TaxTMI 
TaxTMI 
2003 (5) TMI 477
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....iates, Mumbai, and the credit facility was never provided to their customers but enjoyed only by the indenting agent. It is also alleged that the applicant has wilfully suppressed the fact that the motion picture manufactured by them are sold through their indenting/commission agent M/s. Vijaya Associates, Mumbai and that in these cases the payments are collected from the customers by M/s. Vijaya Associates, retained by them and forwarded to M/s. Kodak on due dates and furthermore, the Central Excise documents were prepared by M/s. Kodak in the name of their customers who never made any payments directly to them or enjoyed any credit facility. 2. Accordingly, a demand notice dated 29-9-2000 has been served on the applicant denying the deduction claimed of the factor of "Interest on receivables" during the period September 1995 to May 2000 and demanding Central Excise duty of Rs. 23,23,630.93. 3. The applicant in the application for settlement filed in form SC(E)-1 has admitted an additional duty liability of Rs. 3,04,899/- and given the manner of computation of their admitted duty liability in the Annexure to the SC(E)-1. The applications were admitted vide Order No....
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....d through M/s. Vijaya Associates and during the period April 2000 to May '2000, the entire sale was made on a direct basis. As such, there is no duty liability arising for the period 1999-2000 and 2000-2001 (till May '2000) as the Working sheet given indicates. He also placed reliance on the following case laws to substantiate his claim seeking abatement of the factor of Interest on Receivables :- (a) Gomti Carbon Dioxide, 2000 (119) E.L.T. 569 (T.-LB) = 2000 (38) RLT 1039 (LB); (b) VST Industries Ltd., 1999 (114) E.L.T. 676 (T); (c) 2001 (130) E.L.T. A88; (d) Shalimar Paints Ltd., 2001 (128) E.L.T. 492 (T); (e) MRF Limited, 1995 (77) E.L.T. 433 (S.C.). 7. Revenue was represented by Shri H.S. Vanarse, Sr. Intelligence Officer and Shri S.M. Jawalekar, Intelligence Officer, DGCEI. 8. The Revenue reiterated the contents of the report submitted by them and stated that deduction towards interest on receivables is permitted only when the credit facility is provided to customers whereas in the instant case, the applicant had suppressed the fact t....
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....on it was observed that the applicant was consigning the goods viz. Cinematographic film to customers under the cover of invoices as per the communications received from M/s. Vijaya Associates and who were guaranteeing the payments therefor. In all such cases, the customers were making the payments to M/s. Vijaya Associates either on an immediate basis or on a delayed basis, say after 15 days, a month or 180 days. However, M/s. Vijaya Associates were making the payments to M/s. Kodak of the amounts received from the customers only after the due date of 90 days, which was the credit period made available by the applicant to other buyers. It is not at all the case that there was any sort of explicit agreement between M/s. Kodak and M/s. Vijaya Associates to act as an agent for the applicant or for that matter any credit limits were given by M/s. Kodak to M/s. Vijaya Associates. In fact, the transactions between M/s. Kodak and M/s. Vijaya Associates were not at all disclosed to the Revenue at any point of time. Moreover, there is no allegation of treating the applicant and the indenting agent as "related persons". 14. The manner in which the above factor of I.O.R was being cal....
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....perates as indenting agent for the Kodak Goa factory and asks them to supply directly in favour of customer. We takes guarantee of payments of the said sale. We collect the payments from the said customer and pays to Kodak India Ltd. as per our credit terms fixed as dealer. Q.6. What is your responsibility as indenting agent? Do you get any commission and if yes, what is the percentage? A.6. As indenting agent I have to collect necessary orders from market in my favour and in turn asks Kodak to supply materials to said parties under payment guaranteed by my firm. I collect the payments from the parties and pay to Kodak India Ltd. on 90 days credit terms basis." Statement of Shri Prashant C. Rege, General Manager, M/s. Kodak India Ltd. dated 21-5-1999 "Q.8. It appears from the purchases orders produced by you that all these orders for motion picture film customers are routed through M/s. Vijaya Associates, Mumbai. Please explain the role of M/s. Vijaya Associates. Do you pay any commission to them. A.8 I will make a written submission regarding this with a period of 15 days." Having said that, we take note of the judgments on the instant subject :- (a) &nbs....
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....t on receivables which is allowed to be deducted from the assessable value, the customer/purchaser being aware of the same, delays the payment of the price for the fixed period for which credit facility has been allowed. In the instant case, it is observed from the "unsigned" statement of accounts of Vijay Associates that the customers for whom the orders were placed on the applicant by M/s. Vijay Associates were never in the know of the fact that such a credit facility exists since in some of the cases the payments have been received by M/s. Vijay Associates in a couple of days from the date of the delivery/invoice, or the payment was made either in full or in instalments. The average number of days that the payment realised was outstanding was 22.90 days to 42.28 days as can be seen from the Certificates dated 4-2-00 and 4-7-2000 given by the Chartered Accountant. This being the factual position, it cannot be said that the customers ever enjoyed a credit facility. In fact, on certain occasions it is observed that M/s. Vijaya Associates has offered discounts to the customers. The applicant has not disclosed till date the compensation given to M/s. Vijaya Associates for discount pa....
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....2002 (141) E.L.T. 3 (S.C.) works out to Rs. 6,17,670/- (Rupees Six lakhs seventeen thousand six hundred seventy only) as tabulated in Annexure appended. 23. The case is, therefore, settled on the following terms and conditions Duty of Excise : The case is settled for Rs. 6,17,670/-. Since the applicant has already paid Rs. 3,04,899/-, the balance of Rs. 3,12,771/- is required to be paid within thirty days of receipt of the order. Interest, Penalty and Prosecution :- This is a case where we have raised the amount of duty liability because of interpretational difference between the applicant and us. Since the applicant has co-operated with the Commission through out the course of proceedings before us, immunity is granted to the applicants from levy of interest and penalty under the Central Excise Act/Rules, 1944. The applicants are also granted immunity from prosecution under the Central Excise Act. 24. The above immunities are granted in terms of Section 32K of the CEA'44. 25. The settlement ordered shall be rendered void if it is later on found that it has been obtained by fraud or mis-representation of facts. Annexure to Final Order No. 36/SC/MZ/CE/2003, ....