1986 (8) TMI 202 - AT - Central Excise

Summary

Issues:
- Deductibility of commission paid to agent for procuring orders
- Inclusion of cost of wooden crate (special secondary packing) in assessable value
- Inclusion of cost of regulators in assessable value

Commission:
The appellants sought to exclude the commission paid to an agent for procuring orders from the assessable value of electric fans. The tribunal noted that the commission was not a trade discount but a payment to a third-party agent. While the appellants relied on a Supreme Court judgment, the tribunal found that a different judgment specifically applied to commission paid to an agent. Referring to the relevant Supreme Court judgment, the tribunal upheld the lower orders disallowing the deduction of the commission from the assessable value.

Cost of Wooden Crate:
The appellants argued for the deduction of the cost of wooden crates used for outstation deliveries, claiming it as special secondary packing for safe transport. Although the authorities acknowledged the purpose of the wooden crates, the tribunal observed that the appellants charged the same price to local and outstation buyers regardless of the packing type. As the price to outstation buyers did not reflect the cost of the wooden crate, the tribunal rejected the deduction, emphasizing that notional deductions would distort pricing consistency.

Cost of Regulators:
Regarding the inclusion of the cost of regulators in the assessable value, the appellants cited a Delhi High Court judgment and tribunal rulings predating a relevant tariff amendment. The tribunal noted the tariff amendment explicitly including regulators with fans. As the material period of the appeal fell after the amendment, the tribunal held that the cost of regulators must be included in the assessable value of electric fans supplied with regulators. Consequently, the tribunal upheld the impugned orders related to all three items and dismissed the appeal.

In conclusion, the tribunal ruled against the appellants' requests to exclude the commission paid to an agent, deduct the cost of wooden crates, and exclude the cost of regulators from the assessable value of electric fans. The judgment emphasized the application of specific legal precedents and tariff amendments in determining the assessable value of the goods.