1991 (3) TMI 247 - AT - Central Excise

Summary

Issues:
1. Refund claims on equalized freight duty payment.
2. Rejection of refund claims by Asstt. Collector and Appellate Collector.
3. Revision application against Appellate Collector's order.
4. Consideration of deductions for post-delivery expenses.
5. Appeal against disallowed deductions for post-delivery expenses.
6. Interpretation of Supreme Court judgment on assessable value.
7. Arguments for and against allowing deductions for post-delivery expenses.
8. Decision on the appeals.

Analysis:
The case involves a company manufacturing Aerated Waters, claiming refund on duty paid on equalized freight. The company maintained a fleet of trucks for transportation, and the local Central Excise staff directed duty liability based on destination prices. The company filed refund claims, rejected by the Asstt. Collector and the Appellate Collector as time-barred. The Tribunal earlier held the claims not time-barred and directed a fresh decision. The lower appellate authority considered deductions for post-delivery expenses, allowing some but disallowing others. The company appealed against the disallowed deductions for post-delivery expenses.

The company relied on Supreme Court judgments and Tribunal decisions to support its claim for deductions. The Supreme Court's ruling in Indian Oxygen Ltd. case clarified that collection charges for empty bottles should be excluded from assessable value. The company argued that similar deductions were allowed in other cases involving gas cylinders. The lower appellate authority denied deductions, considering the expenses as part of manufacturing costs. However, the Tribunal disagreed, stating that post-delivery expenses for empty bottles should be deducted from destination prices.

The Tribunal emphasized that post-delivery expenses for empty bottles are distinct from manufacturing costs, as bottles are merely a medium for supplying aerated waters. The expenses incurred for handling empty bottles are necessary for the supply process and should be deducted from destination prices. The Tribunal directed the Assistant Collector to quantify the deductions based on actual expenses shown in the company's accounts. Ultimately, the appeals were disposed of in favor of allowing deductions for post-delivery expenses incurred on behalf of the consumer.