Cce, Raipur Vs. M/S. Vindhya Kabelmates (i) Pvt. - Court Judgment

Excerpt:
1. this is an appeal at the instance of the revenue. when the appeal came up for final hearing, representative of the respondent prayed for adjournment. since the issue raised in the appeal is already covered by decision of this tribunal, we heard ld. dr in detail and perused the records.2. the short question that arises for consideration is whether the interest accrued on advances taken by the manufacturer from customers has gone to increase the value of the goods cleared to them. in other words, the department included the interest earned on the advance to the assessable value of the goods for purpose of levying duty. the adjudicating authority took the stand that the price charged was not idnfluenced by the interest on the security taken has not been proved by the manufacturer. according to him "the onus that the price charged and therefore, the assessabe value were same whether advance was obtained or not rested with the notice and they had failed to adduce any evidence in this regard". when the department proceeded on the basis that the interest earned on the advance taken by the manufacturer went to depress the value of the goods, the burden was on the department to show that the interest on the advance was over and above the value of the goods. thus, the adjudicating authority tried to cast the burden wrongly on the manufacturer. department was having no evidence to show that similar goods were sold to others at higher price, where there was no advance.3. when the manufacturer took up the matter in appeal the appellate commissioner observed "i find that the adjudicating authority proceeded only on the presumption that had the appellant not taken the advance they would have taken loan from the bank and paid interest and would have effected the price of the product". according to the commissioner, the adjudicating authority failed to establish that advance taken had influenced the assessable value of the final product and in the absence of material to show that the advance had gone to depress the value of the final product, interest cannot be added to the assessable value.the adjudication order was set aside and the proceedings initiated by issue of scn dropped.4. the issue relating to advance taken by the manufacturer is covered by the decision of the apex court in the case of vst industries ltd. vs cce, hyderabad reported in 1998(97)elt.395. lordship took the view that in the absence of evidence to show that the notional interest on the advance taken by the manufacturer went to depress the value of the goods, the said notional interest cannot be added to the value of the finished goods for purpose of imposing duty. in the light of this authorities pronouncement the order passed by the commissioner calls for us interference especially in the absence of evidence to show that the interest on the advance had gone to suppress the value of the finished product. the appeal at the instance of the revenue has only to fail. we dismiss the appeal.

Judgment:
1. This is an appeal at the instance of the Revenue. When the appeal came up for final hearing, representative of the respondent prayed for adjournment. since the issue raised in the appeal is already covered by decision of this Tribunal, we heard Ld. DR in detail and perused the records.

2. The short question that arises for consideration is whether the interest accrued on advances taken by the manufacturer from customers has gone to increase the value of the goods cleared to them. In other words, the Department included the interest earned on the advance to the assessable value of the goods for purpose of levying duty. The adjudicating authority took the stand that the price charged was not idnfluenced by the interest on the security taken has not been proved by the manufacturer. According to him "the onus that the price charged and therefore, the assessabe value were same whether advance was obtained or not rested with the notice and they had failed to adduce any evidence in this regard". When the Department proceeded on the basis that the interest earned on the advance taken by the manufacturer went to depress the value of the goods, the burden was on the Department to show that the interest on the advance was over and above the value of the goods. Thus, the adjudicating authority tried to cast the burden wrongly on the manufacturer. Department was having no evidence to show that similar goods were sold to others at higher price, where there was no advance.

3. When the manufacturer took up the matter in appeal the appellate Commissioner observed "I find that the adjudicating authority proceeded only on the presumption that had the appellant not taken the advance they would have taken loan from the bank and paid interest and would have effected the price of the product". According to the Commissioner, the adjudicating authority failed to establish that advance taken had influenced the assessable value of the final product and in the absence of material to show that the advance had gone to depress the value of the final product, interest cannot be added to the assessable value.

The adjudication order was set aside and the proceedings initiated by issue of SCN dropped.

4. The issue relating to advance taken by the manufacturer is covered by the decision of the Apex Court in the case of VST Industries Ltd. vs CCE, Hyderabad reported in 1998(97)ELT.395. Lordship took the view that in the absence of evidence to show that the notional interest on the advance taken by the manufacturer went to depress the value of the goods, the said notional interest cannot be added to the value of the finished goods for purpose of imposing duty. In the light of this authorities pronouncement the order passed by the Commissioner calls for us interference especially in the absence of evidence to show that the interest on the advance had gone to suppress the value of the finished product. The appeal at the instance of the Revenue has only to fail. We dismiss the appeal.