2000 (1) TMI 367 - AT - Central Excise

Issues Involved:
1. Deductibility of freight subsidy from assessable value.
2. Inclusion of free units given to dealers as trade discount in assessable value.
3. Allowance of admissible abatements from the date of provisional assessment.
4. Inclusion of the cost of packing for transportation (COPT) in assessable value.
5. Treatment of "Consumer Offer" free gifts in assessable value.
6. Deductibility of collection charges and related bank charges.
7. Treatment of schemes on invoices and schemes after invoices in assessable value.

Issue-wise Detailed Analysis:

1. Deductibility of Freight Subsidy from Assessable Value:
The assessee argued that the freight subsidy provided by the Government of Sikkim should not be deducted from the freight charges when calculating the assessable value. This argument was supported by a precedent set by the Tribunal in the case of Assam Asbestos Ltd. v. CCE, where it was held that there was no specific provision in law for reducing the cost of transportation due to receipt of subsidies. The Tribunal found the facts of this case to be similar and held that the subsidy should not be added to the assessable value, thus ruling in favor of the assessee.

2. Inclusion of Free Units Given to Dealers as Trade Discount in Assessable Value:
The assessee contended that free units given to dealers as replacements for damaged stock should be considered as trade discounts and thus not included in the assessable value. This position was supported by earlier Tribunal decisions in the cases of Hindustan Lever Ltd. v. CCE and Pond's India Ltd. v. CCE. The Tribunal agreed, noting that replacements for damaged goods were in the nature of trade discounts and should not be included in the assessable value.

3. Allowance of Admissible Abatements from the Date of Provisional Assessment:
The assessee argued that all admissible abatements should be allowed from the date of provisional assessment (01-07-1985) onwards, regardless of whether they were claimed in the price list. The Tribunal agreed, stating that once an assessment is provisional, it remains so until finalized, and all abatements should be allowed as consequential relief from the date of provisional assessment.

4. Inclusion of Cost of Packing for Transportation (COPT) in Assessable Value:
The Revenue argued that the cost of master outer cartons used for transportation should be included in the assessable value. The assessee countered this by citing affidavits and invoices showing that goods were capable of being marketed in inner cartons alone. The Tribunal found that the outer master cartons were primarily for ease and safety of transportation and ruled that their cost should be excluded from the assessable value.

5. Treatment of "Consumer Offer" Free Gifts in Assessable Value:
The Revenue contended that free gifts given as part of "Consumer Offers" should be included in the assessable value. The assessee argued that such gifts were akin to trade discounts in kind. The Tribunal referenced previous decisions, including Hindustan Lever Ltd. v. CCE, and concluded that these free gifts should be considered as trade discounts and excluded from the assessable value.

6. Deductibility of Collection Charges and Related Bank Charges:
The Revenue argued that collection charges and related bank charges should be included in the assessable value. The assessee cited a Tribunal decision (Final Order Nos. 842 to 844/96) that allowed these charges as deductible. The Tribunal found the facts to be identical and ruled that these charges should be deducted from the assessable value.

7. Treatment of Schemes on Invoices and Schemes After Invoices in Assessable Value:
- Schemes on Invoices: The assessee argued that free units provided under sales promotion schemes should be treated as trade discounts. The Tribunal agreed, noting that such discounts were uniformly available, announced in advance, and reflected on invoices, thus qualifying as trade discounts.
- Schemes After Invoices: The assessee argued that replacements for goods damaged in transit should be excluded from the assessable value. The Tribunal referenced previous decisions and ruled that such replacements should be considered trade discounts and excluded from the assessable value. However, the assessee did not press for other free gifts given to dealers to be excluded from the assessable value.

Conclusion:
The Tribunal allowed the assessee's appeal on all grounds, granting consequential relief as per law. The Revenue's appeal was rejected except for the non-availability of abatements for free schemes after invoices.

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