2009 (4) TMI 358 - AT - Central Excise

Valuation- The appellant manufacture various gases. They supply the same in Cylinders to their buyers. In addition to the price of the gases, they collected Cylinder Rental Charges. Revenue proceeded against the appellant on the ground that the cylinder rental charges would be includible in the assessable value. The Original Authority confirmed the demand of under Section 11A for the period from October, 2005 to November, 2006. Interest under Section 11AB was demanded. Equal penalty under Section 11AC was imposed. The appellant approached the Commissioner (Appeals). The Commissioner (Appeals) held that the said rental charges are includible in the assessable value. In the light of the decision of CCE v. Indian Oxygen Ltd. - 1988 (36) E.L.T. 730 (S.C.), held that- It has been consistently held by this Bench and other benches that Cylinder rental charges cannot be added to the assessable value of the gas. In view of this, there is no merit in the impugned order and the same is set aside. Thus, the appeal is allowed with consequential relief.

Summary

Issues: Inclusion of cylinder rental charges in the assessable value for central excise duty assessment.

Analysis:
The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals-I), Bangalore. The appellant, a manufacturer of various gases, supplied gases in cylinders to buyers and collected Cylinder Rental Charges in addition to the gas price. The Revenue contended that the cylinder rental charges should be included in the assessable value for central excise duty assessment. The Original Authority confirmed a demand under Section 11A for a specific period, imposed interest under Section 11AB, and levied a penalty under Section 11AC. The Commissioner (Appeals) upheld the inclusion of rental charges in the assessable value, citing a previous decision despite it being set aside by the Tribunal. The Commissioner's reasoning for upholding the order was the department's non-acceptance of the Tribunal's decision and the low revenue involved in the case, which was deemed a case of judicial indiscipline by the Tribunal.

The Tribunal highlighted that it had consistently held, in this case and others, that cylinder rental charges should not be added to the assessable value of the gas. The Tribunal referenced a previous Final Order in favor of the appellant and also relied on a Supreme Court judgment in CCE v. Indian Oxygen Ltd. The Tribunal found no merit in the Commissioner's order and set it aside, allowing the appeal with consequential relief. The Tribunal's decision was based on established legal principles and precedents, emphasizing that cylinder rental charges should not be considered part of the assessable value for central excise duty assessment. The Tribunal's ruling provided clarity on the issue and upheld the appellant's position, ensuring consistency with previous decisions and legal interpretations.