1980 (9) TMI 101 - CGOVT - Central Excise

Summary

Issues:
1. Inclusion of forwarding/loading charges in the assessable value of super phosphate.
2. Nature of expenses incurred after the excisable product comes into existence.
3. Jurisdictional validity of the Asstt. Collector's order covering periods not cited in the show cause notice.
4. Interpretation of Sec. 4 of the Central Excises and Salt Act, 1944 regarding assessable value.
5. Reliance on the Voltas case for determining the assessable value.
6. Binding nature of lower authority's order on the Government.
7. Validity of Asstt. Collector's decision to include loading/forwarding charges in the assessable price.

Analysis:
1. The petitioners contested the inclusion of forwarding/loading charges in the assessable value of super phosphate, arguing that these expenses were incurred post-manufacturing and at the request of customers. They relied on a previous order stating that post-manufacturing expenses should not be part of the assessable value. The Government noted that under Sec. 4 of the Central Excises and Salt Act, 1944, the assessable value includes expenses up to the point of sale at the factory gate, as the market exists at that point. The existence of a market at the factory gate, as opposed to the factory godown, was crucial in determining the assessable value.

2. The petitioners' reliance on the Voltas case was deemed unfounded by the Government. The Voltas case established that if the wholesale cash price was available at the factory gate, it should be used as the assessable value, provided the transactions were at arms length. The Government clarified that this did not imply shifting the point of assessment from the factory gate to the factory godown within the premises.

3. Regarding the jurisdictional validity of the Asstt. Collector's order covering periods not cited in the show cause notice, the Government found no issue with the Asstt. Collector's decision to include Rs. 1.50 per M. Ton in the assessable value. The addition was approved provisionally by the Range Officer, and the Asstt. Collector's decision was upheld after hearing the petitioners.

4. The Government emphasized that the Appellate Collector's order from 24-7-76, provided by the petitioners, was not binding on them. They did not have all the details of that order and could not consider it in their decision-making process. Therefore, the Appellate Collector's order was not a determining factor in this case.

5. Ultimately, the Government found no reason to interfere with the Appellate Collector's order, stating that it was correct in law and based on the facts presented. Consequently, the revision application was rejected, and the Appellate Collector's decision to include the forwarding/loading charges in the assessable value of super phosphate was upheld.