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2015 (10) TMI 1949 - AT - Central ExciseValuation - whether the cheque discounting charges are includible in the assessable value or not - Held that - The cheque discounting charges are charged by the bank for discounting of cheques to cover for delay in realization of payments by up-country buyers. This is nothing but interest on receivable which in terms of the Apex Court judgment in case of Government of India Vs. Madras Rubber Factory Ltd., reported in 1995 (5) TMI 28 - SUPREME COURT OF INDIA is not includible in the assessable value. We also find that the Apex Court in case of CCE, New Delhi Vs. Vikram Detergent Ltd. (2001 (1) TMI 84 - SUPREME COURT OF INDIA) has held that bank charges are not includible in assessable value and Review petition against this judgments was dismissed by the Apex Court vide judgment reported in 2001 (3) TMI 1027 - SUPREME COURT Hon ble Bombay High Court in case of Raymond Woolen Mills Ltd. Vs. Union of India, reported in 1991 (7) TMI 94 - HIGH COURT OF JUDICATURE AT BOMBAY has also taken the same view. In view of this, the impugned order holding in cheque discounting charges charged by the Revenue are not includible for the assessable value, is not sustainable. The same is set aside - Decided in favour of assessee.
Issues:
1. Inclusion of cheque discounting charges in the assessable value. Analysis: The judgment revolves around the dispute concerning the inclusion of cheque discounting charges in the assessable value. The Commissioner (Appeals) had held that such charges are to be included in the assessable value, leading to the filing of the current appeal. The appellant argued that these charges are akin to interest on receivables and should not be included in the assessable value. Reference was made to previous judgments, such as the one by the Supreme Court in the case of CCE, New Delhi Vs. Vikram Detergent Ltd., which held that bank charges related to outstation cheques are not to be included in the assessable value. The Tribunal's decision in the case of Hindustan Lever Ltd. Vs. CCE, Bangalore was also cited to support the appellant's stance. During the hearing, both sides presented their arguments. The appellant's counsel emphasized that cheque discounting charges are essentially interest on receivables and should not be considered part of the assessable value. On the other hand, the Departmental Representative supported the Commissioner (Appeals)'s findings. After considering the submissions and examining the records, the Tribunal concluded that cheque discounting charges are essentially interest on receivables. The Tribunal referred to various legal precedents to support its decision, including the Supreme Court's judgment in the case of Government of India Vs. Madras Rubber Factory Ltd., which stated that interest on receivables is not to be included in the assessable value. Additionally, the Tribunal cited the Supreme Court's decision in the case of CCE, New Delhi Vs. Vikram Detergent Ltd., where it was held that bank charges are not to be included in the assessable value. The Tribunal also mentioned a judgment by the Bombay High Court in the case of Raymond Woolen Mills Ltd. Vs. Union of India, which supported the same view. Consequently, the Tribunal set aside the impugned order and allowed the appeal.
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