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Issues:
Challenge to the inclusion of transportation charges in the assessable value of Coca-Cola, Fanta-Orange, and Fanta-Soda for excise duty assessment. Analysis: The petitioner, a limited company, challenged the levy, assessment, and recovery of excise duty by the respondents on Coca-Cola, Fanta-Orange, and Fanta-Soda, specifically focusing on the inclusion of transportation charges at Rs. 1.54 per crate in the assessable value of these items. The petitioner claimed to be the exclusive manufacturers and bottlers of these aerated water varieties for specific territories. The wholesale cash prices of the products were stated to be Rs. 6.00 per crate for Coca-Cola and Fanta-Orange, and Rs. 2.25 per crate for Fanta-Soda. The petitioner contended that the wholesale market was limited to their factory premises, and customers purchasing at the factory were charged the mentioned prices, with additional transport charges for those availing transport facilities. The respondents, in their return, disputed the wholesale prices provided by the petitioner, citing price lists submitted for approval and sales data. They argued that the transport charges were uniform for all purchasers in Indore city, included in price lists, and integral to the sale price. Additionally, they claimed that property in the goods passed to customers upon delivery at various business locations, not at the factory gate. The respondents contended that the inclusion of delivery charges and freight in the price was based on the wholesale cash price in the nearest wholesale market liable for excise duty under the Central Excises and Salt Act, 1944. In the judgment, the court referred to relevant Supreme Court decisions emphasizing that excise duty should be levied only on the manufacturing cost and profit, excluding post-manufacturing costs like transport charges. The court found discrepancies in the assessment process and lack of clarity in determining the value for excise duty purposes. Consequently, the court partly allowed the petition, quashing the previous assessments and directing fresh assessments based on the principles established by the Supreme Court decisions. The court ordered the respondents to determine the petitioner's excise duty liability for the specified period, with any excess amount paid to be refunded and any shortfall to be recovered from the petitioner. In conclusion, the court's decision highlighted the importance of excluding post-manufacturing costs like transport charges from the assessable value for excise duty calculation, emphasizing the need for a proper determination of value based on established legal principles.
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