1997 (9) TMI 180 - AT - Central Excise

Summary

Issues:
Challenge to order of Additional Collector of Central Excise regarding collection of extra amounts through debit notes for textile goods, inclusion of various charges in assessable value, and imposition of duty and penalty.

Analysis:
The appellant, engaged in textile manufacturing, filed price lists for goods and cleared them upon duty payment. The dispute spanned 1981-1985 when extra amounts were collected via debit notes from buyers, prompting a show cause notice alleging duty evasion. The Additional Collector's order demanded Rs. 2,29,623.59 and imposed a Rs. 5,000.00 penalty, despite the appellant's objections.

The charges collected under debit notes included differential price, interest on delayed payments, special cutting charges, cartage charges, insurance charges, and special packing charges. The appellant acknowledged duty liability on the differential price but contested inclusion of interest on delayed payments in the assessable value, citing a Supreme Court ruling barring such inclusions.

Regarding special cutting charges, the appellant argued that the cutting was done post-clearance by a job worker outside the factory premises, not affecting the assessable value. Citing a Supreme Court decision, the Tribunal agreed that such charges should not be included in the assessable value.

Charges for cartage, transit insurance, and special packing were also disputed. The Tribunal held that post-clearance activities like cartage and insurance charges should not be part of the assessable value. However, the issue of special packing required further scrutiny due to the appellant's claim of optional superior packing at additional cost, necessitating verification and a fresh decision.

Ultimately, the Tribunal set aside the impugned order, ruling that interest on delayed payment, special cutting charges, cartage, and transit insurance charges should not be included in the assessable value. They directed the addition of the differential price to the assessable value and remanded the case for a decision on the inclusion of the cost difference for alternative superior packing. The jurisdictional authority was tasked with deciding on penalty imposition upon reassessment.