Judgment:
1. The applicant clears pesticides that it manufactures from its factory by payment of duty directly or buyers or to its depot The goods cleared to the deposit may be sold at price lower or equal to or higher than the price at which it cleared from the factory. This happens because there is a interval between the clearance between the depot and clearance from the factory and the seasonal factor which come into effect in between have an effect n the prices. The clearances were assessed provisionally. In the order finalising the assessment, the Dy.
Commissioner has accepted the price at the depot whenever they were not lower than the price at the factory gate, and where they were lower applied the higher price at which they were cleared from the factory.
He also added to the value the cost of transportation from the factory to the depot and from the depot to the buyers' premises. He has not accepted the deduction from the sale price for interest on delayed payment charged by the applicant for clearance from the depot. This account for the short payment of Rs. 1.2 crores. On appeal against this order, the Commissioner (Appeals) has partially allowed the appeal to the extent of allowing for the deduction the cost of transportation from the depot to the buyers premises and also agreed that the actual value at which the goods were cleared from the depot that should form the assessable value. He quantified the duty which has determined to be Rs. 1,20,92,272/-.
2. Counsel for the applicant makes the following submissions. Duty of Rs. 41 lakhs approx. was deposited by the applicant before the assessment was finalised and another sum of Rs. 20 lakhs pursuant to the Commissioner (Appeals)'s stay order. This leaves behind Rs. 59 lakhs approx. The computation made by the Dy. Commissioner fails to take into account the benefit agreed by the Commissioner (Appeals) which comes to Rs. 14 lakhs approx. Duty payable therefore now comes to Rs. 44.72 lakhs. He further contends that there was no basis for disallowance of the deduction towards interest of delayed payment.
Paragraph 65 of the Supreme Court judgment in Madras Rubber Factory 1995 (77) ELT 433 at page 470 allows this deduction. The Dy.
Commissioner has disallowed this on the ground that it is only interest beyond that that is ordinarily allowed that would be entitled to the deduction. The Commissioner (Appeals) has relied on the decision in Saurashtra Chemicals v. CCE 1997 (94) ELT 136, although the basis for that decision the insistence of interest free loan is claimed as deduction is not a feature in the present proceedings. This interest on delayed payment would amount for Rs. 45.29 lakhs. Hence he requires waiver of deposit of further duty.
3. The departmental representative seeks to uphold the Commissioner (Appeals)'s order.
4. The simple calculation as to the duty already paid and to the benefit of doing of the Commissioner (Appeals)'s order have brought to us in our view are acceptable. We also do not find a case for disallowing the interest on delayed payment. From the copies of the invoices that have been produced before us, it is clear that no interest is charged by the applicant with regard to the sales on which the appellant is received in cash; interest only form part of the price when there is no spot payment. In such case there is a lower rate of interest for the period allowed (60) 90 days and penal rate for other.
We do not find a distinction for the two rates of interest. By applying the ratio of the Supreme Court's judgment in MRF Tyres both types of interest would qualify for deduction.