Full Judgment
2. The ld. Counsel Shri P.V. Patankar, arguing the appeals, stated that the appellants are a public limited company producing iron and steel machinery etc. falling under Chapters 72, 73, 84 and 86. In respect of such goods, the appellants got certain advances towards the products.
It is contended by the appellants that these are advance towards the contract price is normally charged for these goods. They also stated that part payment of such price is taken before delivery of goods with a view to compensate for cost incurred and ensure fulfilment of the contract by the buyer. They also emphasised that price of the goods is not influenced by the payments received in advance. In effect they would like to follow the decision of the Madras High Court in Lakshmi Machines Works reported in 1995 (77) E.L.T. 799 (Mad.). They also invited our attention to the recent judgment of the Tribunal in Flex Industries Ltd. v. C.C.E., Meerut 1997 (19) RLT 365 and the decision of the South Regional Bench in the case of MIL Controls Ltd. v. C.C.E.reported in 1997 (19) RLT 681.
3. As against this Shri R.K. Talajia, the ld. JDR, would reiterate vehemently the orders passed by the learned Commissioner.
4. We have considered the rival submissions. We are of the view that the decision of the Tribunal in Flex Industries Ltd. (supra) would be applicable to the facts of this case. In the said judgment it has been held that there was no favoured buyer who advance huge amounts free of interest. Advance of a part of the price was secured free of interest from all buyers, and the Tribunal held that such notional interest should not be added to the assessable value. In the instant case, there is no finding by the Commissioner that there is a nexus between the advance taken and the price at which the goods have been sold which may affect the assessable value under the Central Excise Act. We are of the view that following the judgments of the Tribunal in the said two cases, namely Flex Industries Ltd. v. C.C.E. and MIL Control Ltd. (supra) the impugned order cannot be sustained.Resistence Alloy Industries v. C.C.E. - 1995 (77) E.L.T. 725. However, we have to state that the Division Bench of the Madras High Court in Lakshmi Machines Works Ltd. is later in point of time and we would like to follow the said judgment of the High Court. The judgment cited by the ld. Departmental Representative did not to consider the decision in Lakshmi Machine Works Ltd. We therefore set aside the impugned order and allow the appeals with consequential relief, it any.