1997 (6) TMI 210 - AT - Central Excise

Summary

Issues:
1. Denial of principles of natural justice due to lack of opportunity of hearing.
2. Applicability of the ratio of Supreme Court's decision in the case of Metal Box.
3. Consideration of notional interest on advances in arriving at the assessable value.

Analysis:

1. The judgment addresses the issue of denial of principles of natural justice as the lower authority decided the matter without affording the appellants an opportunity of hearing. The advocate representing the appellant argued that they could have presented arguments to distinguish their case if given a chance. The Tribunal emphasized that while the law laid down by the Supreme Court must be followed, the applicability of the decision's ratio must be examined in each case after hearing the appellants. The Tribunal found a denial of natural justice and set aside the lower authority's decision, remanding the matter for reconsideration after affording the appellants an opportunity to be heard.

2. The judgment delves into the applicability of the Supreme Court's decision in the Metal Box case. It highlights that the judgment in the Metal Box case has been interpreted by the Divisional Bench of the High Court of Madras in the Lakshmi Mills case and also considers a circular issued by the Board and a decision of the First Bench of the Tribunal in the Flex Industries case. The Tribunal emphasizes the need to examine the applicability of the Metal Box judgment in each case after hearing the appellants. It stresses that the lower authorities failed to consider various aspects before deciding to load the price with notional interest, leading to the decision being set aside and the matter remanded for fresh consideration.

3. The judgment extensively discusses the consideration of notional interest on advances in arriving at the assessable value. It compares the facts of the present case with the Metal Box case, where a wholesaler received advances free of interest leading to a discounted price. In contrast, in the present case, advances were secured from all buyers without interest, and the Department failed to prove that these advances affected the price structure. The Tribunal found that there was no extra consideration received beyond the declared price and set aside the lower authorities' decision to load the price with notional interest. The matter was remanded for reconsideration in light of the observations made.

In conclusion, the Tribunal allowed the appeals by remand, emphasizing the importance of affording appellants an opportunity to be heard and examining the applicability of legal precedents in each case. The judgment provides a detailed analysis of the issues of natural justice, the application of legal precedents, and the consideration of notional interest in determining the assessable value.