2001 (8) TMI 845 - AT - Central Excise

Summary

Issues involved:
Claim for abatement in regard to octroi, turnover tax, and secondary freight from the depot to the buyer's premises in respect of Sun Glasses cleared during October 1998 to March 1999.

Analysis:
The appellants, engaged in manufacturing sun glasses, contact lenses, and other products, transferred goods from their factory to various depots across the country for sales. They filed price declarations seeking deductions for various expenses, including octroi, freight, turnover tax, and discounts. Due to uncertainty in the exact amounts of these expenses, provisional assessments were made, which were later finalized by the Deputy Commissioner and Commissioner (Appeals).

The appellants contended that since they couldn't determine the precise amounts incurred for octroi, turnover tax, and secondary freight specifically for sun glasses, deductions should be allowed based on a pro rata allocation to the value of turnover of the sun glasses. They provided certified auditor reports indicating the percentage of expenses related to these heads in relation to total sales. However, the lower authorities rejected the abatement claim, insisting on individual figures for each expense category related to sun glasses.

Upon review, the Tribunal referred to precedents such as Indian Explosives Ltd. v. Collector and Hindustan Lever Ltd. v. C.C.E., which allowed deductions on an average basis when determining exact figures for specific products was impractical. Additionally, the C.B.E. & C. Circular 287/3/97-CX supported the calculation of equalized rates for multi-product factories. Considering these precedents, the Tribunal remanded the case to the Commissioner (Appeals) to reevaluate the claim for pro rata deduction based on the turnover value of Sun Glasses, as supported by the auditor certificates. The Commissioner (Appeals) was also directed to review the appellants' argument regarding the correct duty rate applicable to Sun Glasses.

In conclusion, the Tribunal set aside the previous order and instructed the Commissioner (Appeals) to make a fresh decision following the provided guidelines and legal precedents.