2007 (3) TMI 122 - AT - Central Excise

Valuation(Central Excise) - Appellant claim for deduction of bonus to dealers, commission to agents, freight and transportation charges and bank charges while calculating assessable value - Held that only in case bonus to dealers deduction allowed and penalty set aside

Summary

Issues:
- Disallowance of abatement claimed by appellants for bonus to dealers, commission to agents, freight and transportation charges, and bank charges.
- Imposition of penalties equal to duty amounts.

Analysis:

Abatement Claim - Bonus to Dealers:
- The Tribunal referred to a previous order where it was held that commission, freight, insurance charges, and bank charges are not deductible from the assessable value of goods.
- Following the previous order, the Tribunal allowed deduction for bonus to dealers on an actual basis and remanded the issue for determining the actual amount of bonus.
- However, the abatement claim for commission to agents and freight and insurance charges was rejected based on the ex-works pricing policy.

Abatement Claim - Bank Charges:
- The appellants claimed deduction for bank charges, arguing that the charges were not recoverable from customers and were borne by them.
- The Tribunal noted that the bank charges claimed were in excess of what was contractually recoverable from customers.
- Considering a Supreme Court decision allowing such deductions, the Tribunal remanded the issue to the adjudicating authority for a fresh decision.

Penalties Imposed:
- The appellants indicated their intention to avail deductions on various expenses in letters to the authorities.
- The Tribunal found merit in the appellants' submission that none of the clauses of Rule 173Q applied for imposing penalties.
- Since the appellants complied with procedural formalities and there was no intention to evade duty, the penalties imposed were set aside.

Conclusion:
- The appeals were partly allowed with the following decisions:
- Deduction for bonus to dealers is admissible subject to verification.
- Deduction for commission to agents and freight and transportation charges is not admissible.
- The issue of deduction for bank charges is remanded to the adjudicating authority.
- Penalties imposed on the appellants were set aside.