Annapurna Glass Works (P) Ltd. Vs. Collector of C. Ex. - Court Judgment

Excerpt:
1. these ten appeals involve identical issues, arise out of a common order-in-appeal and relate to the same appellants. there are, therefore, disposed of by this common order.2. the appellants are not represented today. in their letter dated 20.4.1987, they have sent written submissions for our consideration and have requested for disposal of their appeals on merits in their absence. accordingly, we have heard the learned representative of the department and considered the record and the written submissions of the appellants.3. on careful consideration of the matter, we find that apart from the price of the goods stated in their regular invoices, the appellants recovered certain extra charges from their customers through separate bills. in the price lists submitted by the appellants for approval of the competent central excise authority in advance, the appellants had not disclosed these extra charges. this was, therefore, clearly a case of suppression on their part and hence covered by rule 10a of the central excise rules, 1944, as then in force. this rule contained on time limit for recovery of the differential duty on elements of price not disclosed to the" department. no part of the demands raised by the department was, therefore, hit by the time-bar of rule 10.4. so far as the merits of the demands are concerned, the learned representative of the department stated that the matter required to be remanded to the assistant collector for revising the demands in the light of the valuation law since laid down by the hon'ble supreme court in their judgments at:- (3) 1987 (27) e.l.t. 553 (s.c.) - madras rubber factoiy ltd. and ors..5. we agree with the learned representative of the department. as per the aforesaid judgments of the hon'ble supreme court the position in respect of the various elements of extra charges recovered by the appellants is as under :- (1) transport charges beyond the factory gate. - these are deductible for the pur-pose of arriving at the assessable value. (2) un-loading charges. - tliese are deductible as they are incurred after removal of the goods from the factoiy gate. (3) loading charges. - these are not deductible as they are incurred before removal of the goods from the factory gate. (4) interest on delayed payment. - it is deductible, being an element of cost in- curred after removal of the goods from the factory gate. (5) extra packing charges. - (gunny bags and cartons) if the factual position was that the appellants' goods (glass bottles, phials and chimneys) were generally delivered to their wholesale customers only in the primary packing of straw and/or coir rope and special packing by way of gunny bags/cartons etc. was used only at the request of some customers in exceptional cases, the extra packing charges would be deductible for the purpose of arriving at assessable value of the goods. otherwise, not. (6) service charges. - it is not clear from the record as to for what service these char- ges were realised. we are, therefore, not in a position to say definitely as to whether they would be deductible or not deductible. the lower authority may ascertain the true nature of the service charges and then decide their admis-sibiliiy or otherwise in the light of the supreme court judgments.6. brake-up of the admissible and inadmissible elements of cost, as per our observations above, is not available on the record. the appellants are directed to furnish such break-up to the satisfaction of the assistant collector within three months from the date of receipt of this order. thereupon, the assistant collector should re-quantify the amount of the demands in the light of our above observations.7. accordingly, we allow the ten appeals, set aside the lower orders and remand all the matters to the assistant collector for a fresh adjudication in the light of our observations above.

Judgment:
1. These ten appeals involve identical issues, arise out of a common order-in-appeal and relate to the same appellants. There are, therefore, disposed of by this common order.

2. The appellants are not represented today. In their letter dated 20.4.1987, they have sent written submissions for our consideration and have requested for disposal of their appeals on merits in their absence. Accordingly, we have heard the learned representative of the department and considered the record and the written submissions of the appellants.

3. On careful consideration of the matter, we find that apart from the price of the goods stated in their regular invoices, the appellants recovered certain extra charges from their customers through separate bills. In the price lists submitted by the appellants for approval of the competent Central Excise Authority in advance, the appellants had not disclosed these extra charges. This was, therefore, clearly a case of suppression on their part and hence covered by Rule 10A of the Central Excise Rules, 1944, as then in force. This Rule contained on time limit for recovery of the differential duty on elements of price not disclosed to the" department. No part of the demands raised by the department was, therefore, hit by the time-bar of Rule 10.

4. So far as the merits of the demands are concerned, the learned representative of the department stated that the matter required to be remanded to the Assistant Collector for revising the demands in the light of the valuation law since laid down by the Hon'ble Supreme Court in their judgments at:- (3) 1987 (27) E.L.T. 553 (S.C.) - Madras Rubber Factoiy Ltd. and Ors..

5. We agree with the learned representative of the department. As per the aforesaid judgments of the Hon'ble Supreme Court the position in respect of the various elements of extra charges recovered by the appellants is as under :- (1) Transport charges beyond the factory gate. - These are deductible for the pur-pose of arriving at the assessable value.

(2) Un-loading charges. - Tliese are deductible as they are incurred after removal of the goods from the factoiy gate.

(3) Loading charges. - These are not deductible as they are incurred before removal of the goods from the factory gate.

(4) Interest on delayed payment. - It is deductible, being an element of cost in- curred after removal of the goods from the factory gate.

(5) Extra packing charges. - (Gunny bags and cartons) If the factual position was that the appellants' goods (glass bottles, phials and chimneys) were generally delivered to their wholesale customers only in the primary packing of straw and/or coir rope and special packing by way of gunny bags/cartons etc. was used only at the request of some customers in exceptional cases, the extra packing charges would be deductible for the purpose of arriving at assessable value of the goods. Otherwise, not.

(6) Service charges. - It is not clear from the record as to for what service these char- ges were realised. We are, therefore, not in a position to say definitely as to whether they would be deductible or not deductible. The lower authority may ascertain the true nature of the service charges and then decide their admis-sibiliiy or otherwise in the light of the Supreme Court judgments.

6. Brake-up of the admissible and inadmissible elements of cost, as per our observations above, is not available on the record. The appellants are directed to furnish such break-up to the satisfaction of the Assistant Collector within three months from the date of receipt of this order. Thereupon, the Assistant Collector should re-quantify the amount of the demands in the light of our above observations.

7. Accordingly, we allow the ten appeals, set aside the lower orders and remand all the matters to the Assistant Collector for a fresh adjudication in the light of our observations above.