TaxTMI 
TaxTMI 
2014 (8) TMI 657
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....dispute in these appeals is from April 1997 to December 2004. 1.2 The appellant sell gases manufactured by them in their own cylinders in which case they charge a separate amount towards cylinder rental and maintenance in addition to the price of gases and also in the cylinders brought out by their customers. In the latter case while no rental for cylinder is charged, sometimes at the request of the customers, the testing of the cylinders is done and for this, separate amounts are charged. About 40% of the appellant's sales of gases are on their own cylinders and about 40% to 45% of the sales of gases are in the cylinders brought by their customers. In the remaining 15% to 20% cases, the gas is cleared either through pipe line or in tankers. The appellant also arrange transportation of the gases to the customers premises whenever a request for this is made by the customers' for which they separately charge some amount from them. 1.3 There are four points of dispute in these appeals. 1.3.1 The first point of dispute is as to whether the cylinder rental and maintenance charges in cases of supp....
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....ount of Rs. 4,94,303 had been debited by them in the PLA on 8.10.2000 when the department had pointed this out to the appellant and had asked for reversal of entire amount of Cenvat Credit of originally taken. 1.4 The above disputes were adjudicated by the Commissioner by two orders. The order-in-original dated 29.06.2004 is in respect of the period for April, 1997 to October, 2001 by which Commissioner has confirmed a total duty as well as Cenvat Credit demand of Rs. 75,57,795/- against the appellant along with interest under Section 11 AB and besides this, imposed penalty of equal amount on them under Section 11AC and penalty of Rs. 50,000/- on Shri P.K. Gupta, Vice President of the appellant company. The amount of demand confirmed along with interest includes the Cenvat Credit demand of Rs. 9,05,971/- on the cryogenic storage tanks. The dispute in respect of period from 1.11.2002 to 31.12.2004 for which 5 show cause notices had been issued were adjudicated by the Commissioner vide order-in-original dated 22.11.2005 by which total duty demand of Rs. 1,95,85,117/- along with interest under Section 11AB was confirmed and besides this, penalty of equal amount und....
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....here gases were supplied in the appellant's own cylinders, since the gases were marketable as such, without being packed in cylinders in as much as a substantial quantity of the gases is sold in the cryogenic tankers as well as through pipe line, the cylinder rental and maintenance charges would not be includible in the assessable value as in such a situation, filling the gases in the cylinders cannot be said to be essential to make the goods marketable, that in this regard, he relies upon a recent judgment of the Tribunal in the case of CCE, Indore Vs. Grasim Industries Ltd. reported in 2014-TIOL-573-CESTAT-DEL, wherein the Tribunal in para 5.1 of the judgement relying upon the Apex Court judgement in the case of Bombay Tyre International reported in 1983 (14) ELT 1896 (SC) had held that if some goods are marketable without being put into containers, the cost of containers including their testing charges would not be includible in the assessable value, that the ratio of this judgement is squarely applicable to the facts of this case and accordingly, the cylinder rental and maintenance charges in the case where the gases are supplied in the appellant's own cylinder would no....
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....r by reiterating the findings of the Commissioner and pleaded that the issue of inclusion of cylinder rentals/cylinder testing charges in the assessable value in respect of the period w.e.f. 1.7.2000 has been referred by the Apex Court to a Larger Bench in its judgement in the case of CCE, Indore Vs. Grasim Industries - 2009 (241) ELT 321 (SC), wherein the Apex Court expressing doubts about correctness of its decision in the case of CCE Vs. Acer India reported in 2004 (173) ELT-289 (SC) has referred the questions as to whether the concept of 'transaction value, makes any material departure from the deemed normal price concept of the erstwhile Section 4(1)(a) of the Central Excise Act and whether the Section 4 of the Central Excise Act, 1944 as substituted w.e.f. 1.7.2000 and the definition of 'transaction value' in Section 4 (3)(d) are subject to Section 3 of the Act, to a Larger Bench. With regard to the inclusion of the differential freight in the assessable value, he pleaded that the same would be includible in the assessable value of the goods and the judgement of the Apex Court in the Baroda Electric Meter being with regard to the provisions of Section 4, as the sa....
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....ory gate. Therefore, even if the appellant make profit from their activity of arranging transport by charging higher amount than the expenses actually incurred on transportation, the differential freight would not be includible in the assessable value and in this regard, the Apex Court judgement in the case of Baroda Electric Meter (supra) would be applicable. The situation would be different if there is an allegation that the appellant have under-declared the assessable value of the goods at the factory gate and part of the value of the goods is being recovered in form of inflated freight expenses, but this is not the department's case and there is neither any allegation and nor any evidence in this regard. In view of this, the impugned orders confirming duty demand on the freight differential are not sustainable. 8. As regards the inclusion in the assessable value of the cylinder rental and maintenance charges in the case where the gases were supplied in the appellant's own cylinders and the charges for cylinder testing done at the request of the customers, in the cases where the gases were supplied in the cylinders brought by the customers, it is not disputed that the g....