1997 (6) TMI 155 - AT - Central Excise

Summary

Issues:
1. Dispute over assessable value based on two price lists filed by the respondent.
2. Determination of whether the goods in both price lists are identical or of different qualities.
3. Consideration of deduction claimed for actual freight in the price lists.

Analysis:
The Department appealed against the order-in-appeal setting aside the Assistant Collector's order regarding the assessable value of bus seat cushions. The respondent, engaged in manufacturing Polyurethene Foam bus seats, filed two price lists in 1987, leading to a dispute. The first price list declared Rs. 59.00 per running meter, while the second listed Rs. 59.20 per running meter for the same product. The Assistant Collector issued a show cause notice, asserting that both price lists covered identical cushions and should be priced at Rs. 59.20 per meter. The Collector (Appeals) disagreed, accepting the declared price of Rs. 59.00 for the first list and allowing deduction for actual freight, which the Assistant Collector had denied due to lack of specifics.

The central issue revolved around whether the goods in both price lists were of the same quality. The Department argued that since the goods were covered by the same contract, the price should be uniform at Rs. 59.20. In contrast, the respondent contended that the contract only applied to bus seats made from special raw materials, not ordinary seats. The contract between the respondent and the Corporation specified the price for special quality cushions at Rs. 59.20 per meter, indicating a distinction between the two types of cushions.

The Tribunal examined the tender documents and contract to ascertain the quality differences. The contract dated 10-4-1987 explicitly covered only special quality cushions at Rs. 59.20 per meter. The order leading to price list No. 133/87 lacked clarity on the quality distinction, but the reference to "special seat" implied the use of special raw materials. The Tribunal concluded that the goods covered by the contract were indeed special bus seats made from special materials, justifying the price of Rs. 59.20 per meter as directed by the Assistant Collector.

Regarding the deduction for freight, the Tribunal noted that the quantum of freight was unspecified in the price lists due to lack of information at the time. The Assistant Collector erred in disallowing the deduction solely for this reason. The Collector (Appeals) correctly allowed the deduction, subject to providing documentary evidence for the freight amount. The Tribunal upheld this decision, affirming the deduction for actual freight.

In conclusion, the Tribunal set aside the Collector (Appeals) order on the assessable value for price list No. 133/87, reinstating the Assistant Collector's directive to base the value on Rs. 59.20 per running meter. However, the rest of the Collector (Appeals) order was upheld. The appeal was allowed in part, resolving the issues surrounding the assessable value and freight deduction in the case.