2011 (4) TMI 9 - AT - Central Excise

Abatement of equalized freight Demand of duty together with interest and also imposed a penalty of equal amount - The apex court in Baroda Electric Meters Ltd. Vs CCE 1997 -TMI - 44608 - SUPREME COURT OF INDIA wherein the apex court has held that if freight actually paid less than the amount collected by way of equalized freight, the differential duty is not includible in the assessable value

Summary

Issues: Excess abatement claimed by the assessee, differential duty payable, validity of the demand raised, applicability of apex court decision on assessable value calculation.

In this case, the respondents were involved in repacking and clearing detergent powder in various packet sizes. They claimed an abatement of Rs.260/- per MT as equalized freight, while the actual freight paid was only Rs.209.20 per MT, resulting in an excess abatement claim. The total excess abatement during a specific period was Rs.4,24,664.12, leading to a differential duty payable of Rs.76,439.54. A show-cause notice was issued, and subsequent adjudication resulted in upholding the demand, interest, and a penalty. The Commissioner (Appeals) later set aside the adjudication order, prompting this appeal by the Revenue.

Upon hearing both parties, the Tribunal found no grounds to interfere with the lower appellate authority's decision, which relied on the apex court's judgment in Baroda Electric Meters Ltd. vs. CCE. The apex court's ruling stated that if the actual freight paid is less than the equalized freight collected, the differential duty is not to be included in the assessable value. This principle was also supported by earlier decisions in Indian Oxygen Ltd. The Tribunal cited similar cases like ICOMM Tele Ltd. vs. CCE Hyderabad and Mercedes Benz India Pvt. Ltd. vs. CCE Pune, where the apex court's decision was followed. Given the direct applicability of the apex court's decision to the facts of this case, the Tribunal upheld the lower appellate authority's order and dismissed the appeal.