2009 (8) TMI 935 - AT - Central Excise

Summary

Issues:
1. Taxability of difference between value of goods sold by consignment agent and sale price.
2. Inclusion of loading and unloading charges in assessable value.
3. Taxability of security deposit related to unreturned containers.

Analysis:
1. The first issue revolves around the taxability of the difference between the value of goods sold by a consignment agent and the sale price. The appellant argued that unless there is an intimate relation or nexus between the value of goods removed and any expenditure incurred by the consignment agent, such expenses should not be included in the assessable value. The appellant presented a certificate from a Chartered Accountant showing no extra amount was realized. The Tribunal found that without a clear nexus, loading and unloading charges collected by the consignment agent should not be part of the assessable value as required by Section 4 of the Central Excise Act, 1944. The Tribunal highlighted the importance of determining assessable value for each removal and emphasized the need for a direct connection between expenses and removal of goods.

2. The second issue pertains to the inclusion of loading and unloading charges in the assessable value. The Tribunal observed that the Adjudicating Authority did not provide a valid reason for calculating excess sale price. It was noted that the Commissioner agreed with the Authority that such charges are not excludable from the assessable value. However, without a demonstrated nexus to the removal of goods, the Tribunal held that these charges should not be considered part of the assessable value. The Tribunal's decision was based on the lack of evidence showing a direct connection between the charges and the removal of goods.

3. The final issue concerns the taxability of security deposits related to unreturned containers. The appellant contended that such security deposits should not be included in the assessable value. The Tribunal referred to a previous case where it was decided in favor of the appellant regarding the taxability of security deposits on unreturned containers. The Tribunal noted that the Apex Court had dismissed the Revenue's appeal in that case. The Tribunal agreed with the appellant that in cases where returnable containers are not returned, levying duty on the security deposit is not justified. Consequently, the Tribunal allowed the appeal of the appellant based on the findings and reasoning provided in the judgment.