2004 (5) TMI 66

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....uction of the bank charges and collection charges. 2.During the relevant period, the appellant manufactured and sold the goods principally to Government and Public Sector Undertakings. On account of the fact that the payments were not effected against delivery or within any specified period, the payments of the prices became delayed averaging between 3 to 12 months and, therefore, the appellant claimed deduction in respect of interest of such receivables calculated for the period between the date of removal till the date of realisation of payment. The deduction so claimed was supported by Certificate of Chartered Accountant for the relevant period. Deductions were also claimed in the price list filed from time to time. The assessing auth....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....riod during which the payment is deferred has to be deducted or not in the case of Asst. Collector of Central Excise & Ors. v. Madras Rubber Factory Ltd., 1987 (27) E.L.T. 553 (S.C.) = 1986 Supp. SCC 751. This decision again came up by way of review in the decision reported in Government of India & Ors. v. Madras Rubber Factory Ltd. & Ors., 1995 (77) E.L.T. 433 (S.C.) = 1995 (4) SCC 349. In the second judgment, this Court stated as follows :- "The case of the assessee (Madras Rubber Factory) is that where the goods are sold to upcountry wholesale buyers and payments are received quite sometime later, it is indeed a case of sale on credit and, therefore, the interest charged from the date of delivery of goods till the date of realisation ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sequent to the sale from the depots and does not fall within the ambit of any of the expenses held includible in Bombay Tyre International, it is clearly excludible and the claim for this deduction should, therefore, be allowed.  8.In cases where buyers do not make payments immediately against delivery of the goods but payments are received subsequently it would indeed be a case of sale of credit and, therefore, interest is chargeable from the date of delivery of goods till the realisation of price thereof and should be deducted from the value of the goods. The question whether in a given case the price structure itself includes the interest charged or not is a matter for establishment on evidence. The fact that a particular period ....