2008 (2) TMI 703 - AT - Central Excise

Summary

Issues:
The issues involved in the judgment are related to the admissibility of deductions claimed by the respondents for trade discount, freight and octroi, sales tax, and T.O.D. The main contention was whether the cost of transportation charges incurred should be allowed as a deduction.

Trade Discount and Transportation Charges:
The respondents claimed various deductions, including trade discount and transportation charges. The Dy. Commissioner allowed most deductions but disallowed the cost of transportation charges incurred. The appeals were filed on the grounds that the Dy. Commissioner exceeded the show cause notices by not considering documentary evidence and not indicating deductions in the invoice value. The Commissioner (Appeals) accepted the submission of the assessees and allowed the deduction towards freight charges incurred from the depot to the buyers' place. The Revenue appealed against this decision.

Adjudication and Show Cause Notices:
Upon review, it was found that the show cause notices issued to the respondents did not propose to disallow the deductions based on the shift in the place of removal from the assessees' factory to the buyers' place. The notices focused on the lack of substantiating documentary evidence and the absence of deductions in the invoice value. The Commissioner (Appeals) rightly concluded that the adjudicating authority had exceeded the scope of the show cause notices by disallowing deductions on the grounds of a shift in the place of removal. As this issue was not raised in the notices, the appeals by the Revenue were rejected.

Therefore, the Appellate Tribunal upheld the decision of the Commissioner (Appeals) and rejected the appeals by the Revenue, emphasizing that the adjudicating authority had gone beyond the scope of the show cause notices in disallowing deductions related to freight and octroi charges due to a perceived shift in the place of removal.