1998 (12) TMI 242 - AT - Central Excise

Summary

Issues:
1. Inclusion of crate hire charges in the assessable value of beverages.
2. Inclusion of loading and unloading charges in the assessable value.
3. Inclusion of sales promotion and publicity charges in the assessable value.

Issue 1: Inclusion of Crate Hire Charges:
The case involved appeals against orders quantifying excise duty demanded from the assessee and ordering confiscation of goods due to charges like crate hire, loading, unloading, and sales promotion. The department argued that certain charges were camouflaged to evade duty, emphasizing changes in charges post 1-3-1994 when duty became ad valorem. The Commissioner upheld inclusion of crate hire charges in assessable value, rejecting appellant's justifications related to plastic crates and bottle size changes. The appellant cited legal precedents and argued that such charges were not related to manufacturing or sale and that crates were durable packing material. The department contended that charges exceeded actual expenses and were added to beverage prices to avoid duty. The Tribunal found insufficient evidence to support inclusion of charges in assessable value, citing Supreme Court precedents.

Issue 2: Inclusion of Loading and Unloading Charges:
Regarding loading and unloading charges, the department claimed these charges were payable to the appellant despite being incurred by another entity. The Commissioner held that charges incurred in the appellant's premises were includible in the assessable value, irrespective of the payer. The appellant argued that charges for activities post-manufacture should not be included. The Tribunal noted that loading charges within the factory were already included, and found no evidence of funds flowing back to the appellant from the entity incurring charges. Without proof of funds transfer, the charges were deemed not includible in the assessable value, except for loading charges within the factory.

Issue 3: Inclusion of Sales Promotion Charges:
The inclusion of sales promotion and publicity charges in the assessable value was also contested. The department added these charges based on earlier judgments, but the appellant relied on a Supreme Court ruling stating that dealer-incurred advertisement expenses should not be included in assessable value. The Tribunal noted the distinction between expenses incurred by the assessee and those by the dealer, ruling that dealer expenses for promotion should not be included in the assessable value. Consequently, the appeal was allowed, and the impugned order was set aside.

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