1987 (4) TMI 276 - AT - Central Excise

Summary

Issues:
- Deduction of bank interest, insurance premium, and handling charges from the price to determine the assessable value.
- Interpretation of relevant provisions of the Central Excises and Salt Act, 1944.
- Admissibility of charges incurred on unloading, insurance, and bank interest.
- Requirement of filing factory gate price for the price list.
- Examination of charges incurred within and beyond the factory gate for deduction purposes.

Analysis:
The judgment pertains to a de novo adjudication order where the Assistant Collector refused the deduction of bank interest, insurance premium, and handling charges from the price to determine the assessable value, citing the Supreme Court judgment in Bombay Tyre International case. The Collector (Appeals) upheld this decision, emphasizing that the prices of excisable goods were ascertainable from the submitted price lists, and loading prices with post-manufacturing expenses was unjustified. The appellant argued, citing the Supreme Court judgment in M.R.F. Tyres, that charges like unloading, insurance, and bank interest should be admissible for deduction. The appellant contended that either factory gate price should be approved or all charges incurred after goods removal should be deducted, including transit insurance charges, loading/unloading costs, and bank interest.

The respondent contended that the appellants did not provide the factory gate price or specific details of charges incurred, merely listing them as 'expenses' in their invoices. The respondent highlighted that the appellants were seeking exclusion of post-manufacturing expenses rather than acceptance of the price list in Part 1. The Tribunal considered both arguments and relevant case law, determining that only insurance charges for goods in transit and post-clearance were deductible, not those for goods within the factory. Bank interest on credit sales and handling charges beyond the factory gate were deemed deductible. The Tribunal found the previous orders rejecting the deduction claims inadequate in distinguishing between charges within and beyond the factory gate.

Consequently, the Tribunal vacated the impugned orders and remanded the matter to the Assistant Collector for reconsideration. The Assistant Collector was directed to examine the expenses incurred by the appellants, specifically focusing on charges beyond the factory gate for potential deduction. If the appellants could prove such expenses, deduction for insurance charges, handling charges, and bank interest on credit sales should be allowed. The Tribunal allowed the appeal by remand, emphasizing the need for a detailed examination of the expenses to determine their deductibility accurately.