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TMI Blog1994 (12) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... nable drums. They are recovering a sum of Rs. 400/- as deposit for each drum from their customers, which is refundable in case the customers return these drums to the respondent, as per the Agreement with them. A show cause notice was issued for recovery of duty on the cost of the drums, since it was not a permissible deduction under Section 4 of Central Excises and Salt Act, 1944. The Assistant Collector vide his impugned order has dropped the show cause notice, holding that, as and when the buyers chose to return the packing material, the respondent accepts the same and gives back to them the deposit money, as established from the documents. Consequently, relying on the judgment of Supreme Court in the case of K. Radhakrishnaiah - 1987 (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasoning given by the Assistant Collector in his order-in-original. He has relied upon the Supreme Court's judgment in the case of K. Radha Krishnaiah v. Inspector of Central Excise, Gooty & Others, reported in 1987 (27) E.L.T. 598 (S.C.). He had found that there was an arrangement between the respondents and their buyers for the return of the drums. The respondents were obliged to refund the deposit on such returns. The learned Counsel also referred to the sample invoice submitted by the Assistant Collector in which there is mention that the drum deposit will be refunded if the drum is returned intact back to the plant. The learned Counsel submitted that the grounds of appeal of the Department mostly relied to the inclusion of packing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a place in the section; they would be superfluous. The actual return or the extent of the return which are of no relevance. What is necessary, is that if the buyer choses to return the packing, the seller should be obliged to accept and refund the stipulated amount. In the present case the sample of invoices clearly bear an undertaking by the respondents that drum deposit will be re- funded if the drum is returned intact back to the plant on freight pre-paid basis. The Assistant Collector in his order has found as a fact that as and when buyer chose to return the packing, the respondents accept the same and return the deposit money. In such a situation, both the Assistant Collector and the Collector (Appeals) had considered the right crit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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