2005 (4) TMI 149 - AT - Central Excise

Summary

Issues:
1. Inclusion of rental and transport charges in the assessable value of excisable goods.
2. Application of Section 4(1)(a)(iii) of the Central Excise Act, 1944.
3. Modvat credits availed on bottles and inclusion in the assessable value of aerated waters.

Issue 1: Inclusion of rental and transport charges in the assessable value

The appellant, engaged in the manufacture of aerated water, transferred goods to different units under common management and later sold them. The show cause notice raised concerns about additional charges like rental and transport charges not being included in the assessable value. The Appellate Commissioner upheld the inclusion of these charges, citing Section 4(1)(a)(iii) of the Act. However, the Tribunal noted that the charges were for transport from the appellant's places to buyers, not factory gate to godown, and relied on precedents to rule that such charges should not be included. The Tribunal also clarified that rental charges for bottles should not be included, following past decisions. As both charges were not includible, the appeal was allowed.

Issue 2: Application of Section 4(1)(a)(iii) of the Central Excise Act, 1944

The appellant contested the application of Section 4(1)(a)(iii), arguing that the assumption of units being related persons was incorrect as all units belonged to the same entity. The Tribunal agreed, emphasizing that the charges were for transport to buyers, not different places of removal, and thus not covered under the Act. Precedents were cited to support the appellant's position, leading to the dismissal of the appeal challenging the Order-in-Original invoking Section 4(1)(a)(iii).

Issue 3: Modvat credits availed on bottles and inclusion in the assessable value of aerated waters

In a departmental appeal against dropping proceedings related to Modvat credits on bottles, the Commissioner verified the inclusion of packing material costs in aerated waters' value. The Tribunal found the details provided by the appellant's Chartered Accountant to be consistent and held that Modvat credit was justified. Citing precedents, the Tribunal dismissed the department's appeal, affirming the inclusion of bottle costs in the assessable value. The appeal was therefore dismissed.

In conclusion, the Tribunal set aside the impugned orders related to the inclusion of charges in the assessable value of excisable goods and allowed the appeals. The departmental appeals challenging Modvat credits were dismissed, affirming the inclusion of bottle costs in the assessable value. The judgments provided clarity on the non-inclusion of certain charges and the correct application of relevant legal provisions in excise matters.