1997 (8) TMI 222 - AT - Central Excise

Issues Involved:
1. Abatement of rentals and maintenance charges.
2. Transport charges, rental and maintenance charges.
3. Misstatement of facts and evasion of excise duty.
4. Collection of container deposits and rentals.
5. Advertisement expenses.
6. Quantum of abatement and actual expenses.

Issue-wise Detailed Analysis:

1. Abatement of Rentals and Maintenance Charges:
The main issue in the appeals relates to the abatement of rentals and maintenance charges claimed by the appellants in the invoice issued at the time of sale of goods. The adjudicating authorities allowed the respondents' abatement claims. The Revenue argued that the respondents split the sale price to show part as rental and maintenance charges to pay lower duty. The respondents contended that such charges were a trade practice and relied on the Indian Oxygen Ltd. v. CCE decision. The Tribunal upheld the adjudicating authorities' decision, stating that rentals and maintenance charges for crates and bottles are deductible from the assessable value, as supported by the Chartered Accountant's certificate and previous case law.

2. Transport Charges, Rental and Maintenance Charges:
The Revenue argued that the Commissioner overlooked the fact that dealers paid for the return of empty bottles and rental/maintenance charges, enriching the company. They cited the Supreme Court's Madras Rubber Factory case, which stated that the wholesale price includes all expenses and profits. The Tribunal noted that the adjudicating authorities allowed abatement based on the principle that such charges are not to be added to the declared value, relying on established case law.

3. Misstatement of Facts and Evasion of Excise Duty:
The Revenue alleged that the respondents mis-stated facts to evade excise duty by claiming abatement for rentals and maintenance charges without incurring actual expenses. The Tribunal found that the respondents provided necessary data and information, which the adjudicating authorities verified. The Chartered Accountant's certificate and balance sheets were considered, and no contrary evidence was presented by the Revenue.

4. Collection of Container Deposits and Rentals:
The Revenue argued that the collection of container deposits and rentals simultaneously was not justified. They contended that the respondents collected container deposits before and after the duty structure change but started collecting rentals only from 21-3-1994. The Tribunal found that the adjudicating authorities considered the evidence and allowed abatement for rentals and maintenance charges. The respondents' practice of collecting deposits and rentals was deemed permissible, and the Revenue's argument was not upheld.

5. Advertisement Expenses:
The Revenue contended that the adjudicating authorities failed to impose penalties despite finding that advertisement expenses incurred through an advertising agency should be included in the assessable value. The Tribunal noted that the respondents appealed against this portion of the order, and the Tribunal had previously ruled that such expenses are not includible for assessment purposes. Therefore, no penalty was warranted.

6. Quantum of Abatement and Actual Expenses:
The Revenue argued that the adjudicating authorities did not discuss how the quantum of abatement was worked out and whether it was justified. They suggested that deposits taken for crates and bottles, and the interest accrued, could compensate for rentals and maintenance charges. The Tribunal found that the respondents provided detailed information, including a Chartered Accountant's certificate, which the adjudicating authorities verified. The lack of contrary evidence from the Revenue led the Tribunal to uphold the abatement claims.

Conclusion:
The Tribunal dismissed the Revenue's appeals, affirming the adjudicating authorities' decisions to allow abatement for rentals and maintenance charges. The Tribunal emphasized that the respondents provided sufficient evidence, and the Revenue failed to prove otherwise. The Tribunal also upheld the decision that advertisement expenses incurred through an agency are not includible for assessment purposes, negating the need for penalties.

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