1985 (2) TMI 187 - AT - Central Excise

Summary

Issues:
- Appeal against rejection of refund claim based on inclusion of freight charges in assessable value.

Analysis:
The appellants, engaged in manufacturing aerated waters, included freight charges in the assessable value of their product. The dispute arose when the Department directed them to declare the assessable value including such freight charges. The appellants sought a refund of duty paid on freight charges from a specific period. The Appellate Collector rejected the refund claim, leading to the current appeal.

The appellants argued that they delivered goods to customers at their business locations, and the declared price was the destination price. They relied on a Central Board of Revenue order regarding admissibility of deductions for freight charges incurred by distributors. The appellants supported their claim with a Chartered Accountant's certificate detailing post-manufacturing expenses.

On the Department's behalf, it was contended that there was no appeal against the price list approval, and the duty payment was voluntary. The Department maintained that the Appellate Collector's decision did not warrant modification.

The Appellate Collector acknowledged that the freight charges constituted post-manufacturing expenses but rejected the claim due to lack of specific disclosure of actual transport charges in invoices or price lists. However, the Tribunal disagreed with this reasoning. It noted that the appellants had consistently argued that the charges were equalized freight and should be excluded. Citing relevant legal precedents, including a Supreme Court judgment and a Calcutta High Court ruling, the Tribunal found in favor of the appellants.

Consequently, the Tribunal accepted the appeal, overturned the Appellate Collector's decision, and remanded the case for allowing the refund after excluding transport charges from the assessable value, in line with the Supreme Court precedent cited.