S/Shri P.G. Chacko, Sahab Singh, JJ.
REPRESENTED BY : Shri A.K. Prasad, JCDR, for the Appellant.
Shri Aqeel Sheerazi, Advocate, for the Respondent.
[Order per : P.G. Chacko, Member (J)]. –
Having found that the issue involved in appeal No. E/1518/2004, which does not figure in today’s cause list, is similar to the one involved in the present appeal No. E/296/2005, and also that the respondent in both the appeals is the same and only the period of dispute is different, we have called for appeal No. E/1518/2004 to be disposed of with appeal No. E/296/2005.
2. Appeal No. E/296/2005 is arising in a second round of litigation between the assessee and the Revenue. In the earlier round (appeal No. E/529/2003), this Bench by order No. C-I/2301-2302/WZB/2003, dated 29-9-2003 [2004 (163) E.L.T. 260 (Tri.)] remanded the case to the adjudicating authority for fresh decision on the valuation issue. The issue before this bench in the previous round was whether the refundable deposits collected by the assessee (respondent) through their dealers from the ultimate consumers of “Bisleri” water packed in 5 litres and 20 litres containers were liable to be included in the MRP under Section 4A of the Central Excise Act, 1944 for the purpose of levy of Central Excise duty during the period from January, 2000 to April, 2001. This bench noted the Board’s Circular No. 697/13/2003 dated 27-2-2003 wherein it had been clarified that, where the cost of re-usable containers (glass bottles, crates) was ammortised and included in the cost of the product, the question of adding any further amount towards this account in the assessable value of the said product did not arise except where audit of account revealed that the cost of re-useable containers had not been ammortised and included in the value of the product, and it was further clarified that this instruction would be applicable to assessments under Section 4A of the Act as well. This bench took the view that the valuation issue required to be re-examined in the light of the above circular. Accordingly, appeal No. E/529/2003 was allowed by way of remand and the Commissioner was required to take fresh decision in the light of the above circular and after considering the Chartered Accountant’s certificates produced by the assessee.
3. The Commissioner’s order impugned in the present appeal No. E/296/2005 was passed in pursuance of the above remand order and in adjudication of a total number of 9 show-cause notices, 4 of them together covering a period subsequent to the period of dispute involved in the remanded case. The learned Commissioner dropped the proceedings. Hence the present appeal No. E/296/2005 filed by the Revenue.
4. Order-in-Original No. 14/2003 dated 27-3-2003 had been passed by the Commissioner in adjudication of a different show-cause notice covering the period from April, 1999 to February, 2000, dropping the proceedings initiated against the assessee. In that order also, the learned Commissioner took the same view. The appeal No. E/1518/2004 of the department is directed against that order.
5. After hearing both sides and considering their submissions, we are of the view that the learned Commissioner has not implemented the Board’s circular in its spirit. By Circular No. 643/34/2002-CX.1, dated 1-7-2002 which was referred to in subsequent circular dated 27-2-2003, the question considered by the Board was “How is the cost of reusable containers to be determined for inclusion in the transaction value” of excisable goods. This question was answered as follows :
“Normally the cost reusable containers (glass bottles crates, etc.) is amortised and included in the cost of the product itself. Therefore the question of adding any further amount towards this account does not arise, except where Audit of accounts reveals that the cost of the reusable container has not been amortised and included in the value of the product.”
6. In circular dated 27-2-2003 ibid, Board clarified that the above instructions would equally apply to goods assessed under Section 4A also. In other words, if the cost of reusable containers (glass bottles, crates, etc.) is amortised and included in the cost of products to be assessed under Section 4A, the question of adding any further amount towards such cost does not arise except where audit of accounts reveals that the cost of reusable containers has not been amortised and included in the value of the product. In both the impugned orders, the learned Commissioner considered the Board’s clarification and proceeded to hold that, as per the Chartered Accountant’s certificates produced by the assessee, the cost of reusable containers was amortised and included in the cost of ‘Bisleri’ water and hence there was no question of including the refundable deposits collected from ultimate consumers, in the MRP of the product. We have also perused a sample of the Chartered Accountant’s certificates available on record. In these certificates, the Chartered Accountant certified, “on the basis of the records and documents produced before me and information and explanations given to me by M/s. Parle (Exports) Limited” that the company had collected/ refunded certain deposits during the period from 1-1-2000 to 30-11-2000. Another sample of certificate indicates that the cost of empty container was amortised on a certain basis and the amortised value included, in the MRP of 20 litre Bisleri Water, ₹ 70/-, and in the MRP of 5 litre Bisleri water, ₹ 25/-. This certificate was also issued “on the basis of records and the documents produced before me and information and explanation given to me by M/s. Parle (Exports) Limited”. The learned Commissioner apparently accepted these certificates to be conclusive evidence of amortisation of the cost of empty containers and its inclusion in the MRP of the ‘Bisleri’ water. There is no indication, in the impugned orders, that any of the relevant records and documents having been independently verified by the Commissioner. It was incumbent upon him to have an audit of accounts under Section 14A of the Central Excise Act, 1944 done to ascertain whether the fact certified by the Chartered Accountant was correct. In our view, the Board’s circulars impliedly made it incumbent upon the Commissioner to take all measures within his command to ensure that the cost of the reusable containers has been amortised and included in the MRP of the product, before taking a view in favour of the assessee. Before us, the learned JCDR and the learned counsel have also agreed on the applicability of Section 14A of the Act to the peculiar factual situation obtaining in this case. The remand order passed by this bench was not to be understood as a green signal for blindly accepting the Chartered Accountant’s certificates. It should have been read with the applicable provisions of law and the facts and circumstances of the case. Therefore, we are constrained to allow both these appeals by way of remand, with a request to the Commissioner to pass fresh speaking orders on the valuation issue after taking such measures as indicated herein and giving the assessee a reasonable opportunity of being heard.
7. Before parting with the matter, we would like to mention that M/s. Parle (Exports) Limited merged with M/s. Parle Bisleri Limited and M/s. Acqua Bisleri (India) Ltd. w.e.f. 1-12-2000 as per the High Court’s order dated 19-9-2001 and that the company is known as Parle Bisleri Private Limited w.e.f. the said date. We have added this information, which came to our notice during the course of hearing only, because the period of dispute is partly before and partly after the date of merger of the companies
(Dictated in Court)
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