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TMI Blog1994 (2) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... at which the products are sold to the wholesale dealers. Further from the enquiry conducted at the wholesale dealers at M/s. Taro Taja of Hindpiri, 2nd Street, Ranchi and that M/s. Karanpura Beverages Agency, Main Road, Ramgarh, it appears that initially they raised a bill on the distributing agencies as per the price list approved by the department and subsequently raised an additional bill on the distributing agencies for recovery of so-called loading and unloading charges, container recovery charges, advertisement and delivery charges. Thus it appeared to the department that the second bill raised by them was to escape excise not as these charges were not mentioned in the price list submitted for approval which should have been furnished in the appropriate column of the price list as required under Rule 173C of the Central Excise Rules, 1944 for determination of assessable value. Further enquiries were conducted on 7-5-1982 and 21-6-1982 when the Central Excise Officers interrogated the General Manager (Finance) of the Company. During the investigations, a chart showing various charges other than approved price charged from the distributing agencies during the years 1977-78 to 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em were on behalf of the customers and for this purpose the assessee was doing nothing but a job work of the customers. In respect of container recovery charges it was submitted that they did not sell container i.e. bottles to customers. The bottles are returnable by the customers as per pattern of sale and customers used to keep deposit as security for the value of the container and for which the appellants used to issue a debit note to them. Such debit note was referable to or linked with every invoice raised against each consignment of the goods sold and the value of the container so deposited by the buyers was returnable to them on receipt of the empty containers in good condition. Charges of raising second bill and charges in contravening the provisions of Central Excise Rules were also denied by the appellant in reply to the said show cause notice. The Collector who adjudicated the proceedings negatived the contentions of the party and while upholding the charges in the show cause notice observed that there is ample evidence that the assessee has declared very low assessable value of their products compared to the correct assessable value as it should have been if he had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old through Branch offices at the instance of the department. Both the price lists were duly approved by the department after due investigation and verification of records. Since part I price list was available the appellants were not required to file part IV price list and having filed the same as directed by the department, claimed certain deductions in respect of part IV price list but no deduction has been claimed with reference to part I price list. These two prices were mixed up by the department and the Collector with that confusion has gone beyond Section 4(1)(a) in considering allowances and deductions while determining the assessable value. It is not a case where deductions were claimed with reference to part I price list and hence additions are unwarranted to the approved price list. It is settled that post manufacturing expenses are not to be included in the assessable value. The assessable value as per Section 4(1)(a) is the normal price at which the goods are sold in wholesale lot at the time of removal from the place of manufacture to a buyer other than a related person where price is the sole consideration for the sale. Since such normal price was available, the dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention that nothing was gained from such realisation but incurred net losses and department has not established any document to show charging over and above cost price. He also submitted that no penal action could be taken either under Rule 9(2) or under Rule 173Q and penalty is not justified in the absence of mens rea. 4. Shri Prabhat Kumar, learned SDR for the Revenue submitted that the department was not confused with the issues or mingled up with the two lists as it was argued by the other side and on the other hand it is the counsel for the appellants who has gone beyond the show cause notice and reply by twisting the facts. He said that additional information supplied at this stage cannot be considered as it was not traversed in the adjudication proceedings. He stated that it is clear from the show cause notice that the products are sold by them through their distributing agents appointed by them. Initially they raised a bill on the distributing agencies as per the price list approved by the department and subsequently raised a second bill on such distributing agencies for recovery of so-called loading and unloading, container recovery, advertisement and delivery charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ottling Co. Ltd. v. Collector of Central Excise, reported in 1993 (63) E.L.T. 526 (Tribunal), he said that service charges collected by the appellants in respect of activities viz. transportation or the delivery charges, unloading, sorting and cleaning of bottles etc. relate to manufacture of the excisable goods and as such they are to be included in the assessable value. He said that all costs incurred for delivery of the goods at the factory gate and transportation charges for return journey of empty bottles used for aerated water to factory are includible in the assessable value, relying upon the decision in the case of Govind Poy Oxygen Ltd. v. Collector of Central Excise, reported in 1988 (34) E.L.T. 725 and in the case of Aqueous Victuals Pvt. Ltd. v. Collector of Central Excise, reported in 1988 (38) E.L.T. 42 (Tribunal). He stated that container recovery charges can be claimed as deduction to the extent of actual charges but are not entitled to claim retention charges for the second time as it was done in this case. 5. As regards advertisement charges he said that there was no documentary evidence to show that it was job charges since it was incurred not only within the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 1985 SC 470, N.B. Sanjana v. The Elphinstone Spinning Weaving Mills Co. Ltd., reported in AIR 1971 SC 2039 = 1978 (2) E.L.T. (J 399) and Carbonink Products v. Government of India, reported in 1992 (61) E.L.T. 19 (Madras). He also referred to the decision of the Supreme Court in the case of Afzal Ullah v. State of Uttar Pradesh, in support of his contention that pleas which have not been taken at the original proceedings are not to be allowed at the appellate stage. On the issue of limitation he submitted that undisclosed debit notes and claiming deductions and abatements without disclosing in the price list amount to suppression and extended period of five years for recovery of duty and imposition of penalty was justified. In support of this plea he referred to the decisions Mysore Rolling Mills Pvt. Ltd. v. Collector of Central Excise, Belgaum, reported in 1987 (28) E.L.T. 50 (SC), Collector of Central Excise v. Metal Box India Ltd., reported in 1989 (39) E.L.T. 79 (Tribunal), Collector of Central Excise, Bangalore v. Wipro Information Technology Ltd. reported in 1989 (39) E.L.T. 113 (Tribunal) and Jaishri Engineering Co. Pvt. Ltd. v. Collector of Central Excise, reported in 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry charges, it is settled that expenses incurred for loading of the goods within the factory upto stage of delivery are includible in the assessable value irrespective of who has paid for the same but charges for loading and unloading done outside the factory gate are not includible in the assessable value as it was held by the Supreme Court in the case of Indian Oxygen Ltd. v. Collector of Central Excise, reported in 1988 (36) E.L.T. 723. Following the ratio of the aforesaid decision we hold that transportation and delivery charges are not to be included in the assessable value. Similarly following the ratio of the decision in the case of Collector of Central Excise v. Indian Oxygen Ltd., reported in 1988 (36) E.L.T. 730 and Aqueous Victuals Pvt. Ltd. v. Collector of Central Excise, reported in 1988 (38) E.L.T. 42 we hold that rent and retention charges in respect of empty bottles and crates are not includible in the assessable value since rental would be though ancillary but would not be the price for the manufacture and accordingly would not constitute part of the assessable value. Since factory gate sales is available even if it is 1% out of total sales, additional transportati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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