Wiltech India Ltd. Vs. Collector of Central Excise - Court Judgment

Excerpt:
1. shri prashant bhatnagar, regional sales executive in the delhi office of the appellant is present before us. he prays for an adjournment on the ground that the appellants consultant is pre-occupied. it appears that he has received a fax message to that effect from appellants factory at mysore. he is unable to indicate who the consultant is and in what manner the consultant is pre-occupied. we are not satisfied that this is a sufficient ground for adjournment.hence the request for adjournment is rejected. shri prashant bhatnagar states that he does not want to address arguments. we have heard shri t.r. malik, sdr and perused the papers.2. appellant, engaged in the manufacture of razors and razor blades was, from time to time, filing price lists claiming appropriate deductions and the price lists were being approved subject to verification of actuals. goods were being taken to depots and sales were being effected from depots. duty was being paid on the clearances at the factory gate on the basis of the approved price lists. rt12 returns were finalised. subsequently appellant filed a claim seeking refund of rs. 1,89,573/-. assistant collector rejected the claim and the rejection has been confirmed by the collector (appeals). hence the present appeal.3. para 1 of the refund claim states that the appellant has been filing price lists claiming deductions on account of freight, insurance, octroi, turnover tax, discount, interest on finished goods, interest on sundry debtors and packing material but the assessment has been finalised allowing only deductions on account of freight, insurance, octroi and turnover tax and the deductions on account of interest on finished goods, interest on sundry debtors and packing material have not been allowed. the statement in paragraph 1 is not accurate. in the price list deduction has been claimed only on freight, trade discount, sales tax, octroi and insurance on finished goods in transit. no other deduction has been claimed. one of the grounds on which claim for refund has been rejected is that the relevant deductions had not been claimed in the price list. this ground for rejection is not sustainable since even in respect of deduction not claimed in the price list, it is open to the manufacturer to seek relief under section 11b of the act.4. refund claim is based on three counts. the first count relates to interest on finished goods in transit. the decision of the supreme court in m.r.f. ltd. case 1995 (77) e.l.t. 433 (para 67) makes it clear that such interest is not deductible. another ground of refund relates to the cost of secondary packing. the only submission in this behalf in the refund claim is the following : "in respect of packing we have claimed deduction only in respect of such elements as are used to protect the goods from damage in transit and not the materials used for wrapping the blades and the boxes used for packing them. these are deductible on the basis of the supreme court judgment in the case of godfrey philips -1985 (22) e.l.t. 306 (s.c.)".this is not a clear statement of facts. even in the present appeal memo facts relevant to this context have not been explained. appellant has not cared to indicate what exactly are the various types of packing materials used. from the above quoted passage we take it that the refund claim is in respect of cost of materials for wrapping blades and the boxes used for packing them. the law on this point has been laid down by the supreme court in m.r.f. ltd. case, 1975 (77) e.l.t. 433. we feel that the matter should be re-examined by the jurisdic-tional authority in the light of the decision of the supreme court. the third count of refund relates to interest on receivables. the show cause notice alleged that this as well as refund claim on other counts is not sustainable in view of the fact that relevant deductions were not claimed in the price lists. we have indicated that this is not a tenable ground for rejecting the refund claim. the show cause notice further states as follows : "the deductions on account of interest on finished goods, interest on sundry debtors and cost of so called secondary packing do not otherwise also appear admissible..." however, in his order, the assistant collector stated that the assessee did not adduce any evidence to show that sales were on credit and the payments were made much after the actual sale and delivery and interest was charged on the credit sales. this was not an objection taken in the show cause notice. it does not appear that the appellant was called upon to adduce any evidence in this behalf. therefore, rejection of the claim without granting an opportunity to adduce evidence appears unsustainable. this aspect of the matter has to be considered afresh.5. while confirming the finding of the lower authorities that there cannot be any refund on account of interest on finished goods, we set aside the findings of the lower authorities in regard to interest on receivables and the cost of alleged secondary packing and direct the jurisdictional adjudicating authority to consider the refund claim afresh in regard to the aforesaid two counts after giving an opportunity to the appellant to adduce necessary evidence and of personal hearing. the orders impugned are confirmed in part and set aside in part as indicated above.

Judgment:
1. Shri Prashant Bhatnagar, Regional Sales Executive in the Delhi office of the appellant is present before us. He prays for an adjournment on the ground that the appellants Consultant is pre-occupied. It appears that he has received a fax message to that effect from appellants factory at Mysore. He is unable to indicate who the Consultant is and in what manner the Consultant is pre-occupied. We are not satisfied that this is a sufficient ground for adjournment.

Hence the request for adjournment is rejected. Shri Prashant Bhatnagar states that he does not want to address arguments. We have heard Shri T.R. Malik, SDR and perused the papers.

2. Appellant, engaged in the manufacture of razors and razor blades was, from time to time, filing price lists claiming appropriate deductions and the price lists were being approved subject to verification of actuals. Goods were being taken to Depots and sales were being effected from Depots. Duty was being paid on the clearances at the factory gate on the basis of the approved price lists. RT12 returns were finalised. Subsequently appellant filed a claim seeking refund of Rs. 1,89,573/-. Assistant Collector rejected the claim and the rejection has been confirmed by the Collector (Appeals). Hence the present appeal.

3. Para 1 of the refund claim states that the appellant has been filing price lists claiming deductions on account of Freight, Insurance, Octroi, Turnover tax, Discount, Interest on finished goods, Interest on sundry debtors and packing material but the assessment has been finalised allowing only deductions on account of Freight, Insurance, Octroi and Turnover tax and the deductions on account of Interest on finished goods, Interest on sundry debtors and packing material have not been allowed. The statement in Paragraph 1 is not accurate. In the price list deduction has been claimed only on Freight, Trade discount, Sales tax, Octroi and Insurance on finished goods in transit. No other deduction has been claimed. One of the grounds on which claim for refund has been rejected is that the relevant deductions had not been claimed in the price list. This ground for rejection is not sustainable since even in respect of deduction not claimed in the price list, it is open to the manufacturer to seek relief under Section 11B of the Act.

4. Refund claim is based on three counts. The first count relates to interest on finished goods in transit. The decision of the Supreme Court in M.R.F. Ltd. case 1995 (77) E.L.T. 433 (Para 67) makes it clear that such interest is not deductible. Another ground of refund relates to the cost of secondary packing. The only submission in this behalf in the refund claim is the following : "In respect of packing we have claimed deduction only in respect of such elements as are used to protect the goods from damage in transit and not the materials used for wrapping the blades and the boxes used for packing them. These are deductible on the basis of the Supreme Court judgment in the case of Godfrey Philips -1985 (22) E.L.T. 306 (S.C.)".

This is not a clear statement of facts. Even in the present appeal memo facts relevant to this context have not been explained. Appellant has not cared to indicate what exactly are the various types of packing materials used. From the above quoted passage we take it that the refund claim is in respect of cost of materials for wrapping blades and the boxes used for packing them. The law on this point has been laid down by the Supreme Court in M.R.F. Ltd. case, 1975 (77) E.L.T. 433. We feel that the matter should be re-examined by the jurisdic-tional authority in the light of the decision of the Supreme Court. The third count of refund relates to interest on receivables. The show cause notice alleged that this as well as refund claim on other counts is not sustainable in view of the fact that relevant deductions were not claimed in the price lists. We have indicated that this is not a tenable ground for rejecting the refund claim. The show cause notice further states as follows : "The deductions on account of interest on finished goods, interest on sundry debtors and cost of so called secondary packing do not otherwise also appear admissible..." However, in his order, the Assistant Collector stated that the assessee did not adduce any evidence to show that sales were on credit and the payments were made much after the actual sale and delivery and interest was charged on the credit sales. This was not an objection taken in the show cause notice. It does not appear that the appellant was called upon to adduce any evidence in this behalf. Therefore, rejection of the claim without granting an opportunity to adduce evidence appears unsustainable. This aspect of the matter has to be considered afresh.

5. While confirming the finding of the lower authorities that there cannot be any refund on account of interest on finished goods, we set aside the findings of the lower authorities in regard to interest on receivables and the cost of alleged secondary packing and direct the jurisdictional adjudicating authority to consider the refund claim afresh in regard to the aforesaid two counts after giving an opportunity to the appellant to adduce necessary evidence and of personal hearing. The orders impugned are confirmed in part and set aside in part as indicated above.