2005 (9) TMI 463 - AT - Central Excise

Summary

Issues:
Appeal against duty demand and penalty imposition based on the inclusion of "financial cost" in the assessable value.

Analysis:
The appellant argued that the financial cost represented interest charged for payments within seven to thirty days. However, the Commissioner disagreed, stating that financial cost was broader than interest and should be part of the assessable value.

Upon reviewing the records, it was found that the appellant's sales order form clearly mentioned the conditions, including the separate mention of financial cost to be charged extra. The form also outlined provisions for cash discount for early payment and interest for overdue payments, indicating that financial cost was distinct from interest.

The invoices provided by both the Revenue and the assessee showed that financial cost was treated as an additional charge, not as part of the yarn's cost. This further supported the argument that financial cost was related to interest for delayed payments, not the sale price of the yarn.

It was established that any cost related to delay in payment, whether termed as interest or financial cost, should not be included in the assessable value at the time of goods removal. The Supreme Court's decision in a similar case supported the deduction of such post-removal expenses from the sale price, reinforcing the appellant's position.

Based on the legal position and the evidence presented, the duty demand was deemed unsustainable. Consequently, the impugned order was set aside, and the appeals were allowed with any necessary consequential relief for the appellants.