Judgment:
1. This appeal filed by the revenue is directed against the Order-in-Original No. 8/97 dt. 19.2.97, by which the Ld. Commissioner has dropped the proceedings regarding the demand of duty of including the notional interest on advances received from the customers in the assessable value in respect of pre-fabricated buildings manufactured by them. Revenue has filed an appeal against this order of the Commissioner on the ground that the assessee had received the advances from the customers and adjusted the same while finalising the total sum. The assessees themselves, have, in their written reply to the show cause notice, admitted the fact of taking advances from their customers to ensure proper performance of contract. The revenue while relying on the Apex Court judgment in the case of Metal Box container Ltd. however, submitted that the question of charging the same price to the buyers for the same goods for those who have deposits and those who have not, does not arise, since the goods, namely, were made to order and were fabricated to meet the specific designs and requests from customers. The revenue pleaded that the Hon'ble Supreme Court in the Judgment rendered in the case of Metal Box India Ltd., 1995 (49) ECC 67 (SC) : 1995 (75) ELT 449 (SC) has held that the notional interest on advances made by the customers to the manufacturer assessees is addable to the price to arrive at the assessable value. The revenue also relied on the judgment rendered by the Tribunal in the case of Resistance Alloys (I) Ltd., 1995 (77) ELT 721 (T), in which, it was held that burden is on the assessee to prove the advances received were not used in the manufacture of excisable goods and the deposits/advances were kept separately. He further pleaded that the interest on deposit/advances in a cost of capital and hence is includible in the assessable value, in terms of Section 4 of the C.E. Act, 1944. They have therefore, prayed to determine whether the order passed by the Ld.
Commissioner is legal and proper or pass such other orders as may be deemed fit by the Tribunal.
2. Ld. DR Shri C. Mani, reiterates the grounds on which the appeal has been filed by the revenue and has invited our attention to the judgment rendered by the Hon'ble Supreme Court in the case of Metal Box India Ltd. (supra) and the judgment rendered by the Tribunal in the case of Resistance Alloys (I) Ltd., (supra) to set aside the order of the Ld.
Commissioner.
3. Shri M. Venkatraman, Ld. Advocate for the appellants submits that the issue is no longer res Integra and has been decided by this Bench in the case of CC, Chennai v. Laxmi Precision Tools Ltd. and Ors., 2002 (83) ECC 487 (T) : 2002 (51) RLT 454 (CEGAT-Chen.), in which, it has been held that in case of goods which are tailor made against specific orders of the customers, the notional interest incurred on those interest free deposits, which are taken to ensure that purchasers do not back out is not to be included in the assessable value, as the price is not influenced by such deposits. He also distinguished the judgments rendered by the Apex Court judgment in the case of Metal Box India Ltd. (supra) and by the Tribunal in the matter of Resistance Alloys (supra) and has invited our attention to the judgment rendered by the Apex Court in the case of VST Industries Ltd. v. CC, Hyderabad, 1998 (59) ECC 235 (SC): 1998 (97) ELT 395 (SC) which has been applied by this Bench as well as by various co-ordinate benches. The Ld.
Advocate however, submitted that for inclusion of the notional interest to the assessable value, there has to be a nexus between the advances received and the price charged. He further submitted that in the present case there is no such allegation by the department or any quantification thereof. The department has also not produced any evidence to prove any nexus between the advances and the prices charged.
4. We have considered the rival submissions and find that the issue is no longer res Integra and it has already been clearly laid down by the Hon'ble Apex Court in the case of VST Industries Ltd. v. CC, Hyderabad (supra), that if the assessee is charging a uniform price from wholesale buyers irrespective of the fact that, whether the buyer was buying goods on credit or against cash deposit and if interest free deposit was introduced by the assessee because of commercial consideration of covering the risk of credit sales, and if there is no special discount given by the assessee to buyers keeping the deposit, then the excise duty is chargeable only on the uniform price paid by the buyer without any addition of notional interest on such deposits, in this connection, we have already decided the issue in the matter of CC, Chennai and Anr. v. Laxmi Precision Tools Ltd. & Ord., 2002 (83) ECC 487 (T): 2002 (51) RLT 454 (CEGAT-Chen.), in Para 6 of the above order is extracted below: We find that the issue is no longer res Integra and it has been clearly laid down by the Hon'ble Apex Court in the case of VST Industries v. CCE, Hyderabad, 1998 (59) ECC 235 (SC): 1998 (24) RLT 221 (SC): 1998 (97) ELT 395 (SC) that if the assessee is charging a uniform price from wholesale buyers irrespective of the fact that whether the buyer was buying goods on credit or against cash and if interest free deposit was introduced by the assessee because of commercial consideration of covering the risk of credit sales and there is no special amount of reduced price given by assessee to buyers keeping the deposit, then the excise duty chargeable only on the uniform price paid by the buyer without any addition of notional interest on such deposit. This Bench has also taken similar decision, following the ratio of the Hon'ble Apex Court Judgment in VST Industries Ltd. (supra), vide Final Order No. 1212/2001 dated 25.07.2001 and upheld the order of the Commissioner (Appeals) and have rejected the appeals filed by revenue. Similar appeals filed by CCE, Hyderabad, CCE, Coimbatore in the case of Lokesh Machines Ltd., and M.M. Engineering (P) Ltd. were also rejected by this Bench vide Final Order Nos. 981 to 985/2001 date 26.6.2001. Therefore, following the ratio laid down by the Hon'ble Apex Court rendered in VST Industries v. CCE, Hyderabad (supra) and various orders passed by this Bench, we find that there is no merit in these appeals filed by Revenue and the appeals are therefore rejected.
5. Respectfully following the judgments rendered by the Hon'ble Apex Court in the case of VST Industries Ltd., v. CC, Hyderabad (supra) and in the case of CC, Chennai v. Laxmi Precision Tools Ltd. and Ors.
(supra) and various other decisions rendered by the coordinate Benches as well as by this Bench, we do not find any merit in this appeal filed by revenue and the same is hereby rejected. Ordered accordingly.