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TMI Blog1996 (10) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the finished products on payment of excise duty. Subsequently refund claims were submitted alleging that freight charges, packing expenses, forwarding charges 21/2% commission allowed to sole-selling agent and 5% commission allowed to other agents had been erroneously included in the assessable value on which duty had been paid and proportionate duty on the part of assessable value reflecting the aforesaid elements was to be refunded. Assistant Collector held that only freight charges were to be deducted in arriving at the assessable value and accordingly allowed refund of Rs. 4,14,064.98, Rs. 5,31,664.88 and Rs. 3,91,718.88 and disallowed refund of balance amounts claimed. The amounts refunded represented the duty element on the freigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refund. 4. In Synthetic Detergents Ltd. v. Collector of Central Excise, Cochin - 1987 (30) E.L.T. 954 (Tribunal) the view taken by the Collector that the amount of duty collected from customers and not paid to the Government should form part of the assessable value of the goods as amount of duty element should form part of the value of the goods and it is not the amount of duty deductible in terms of Section 4(4)(d)(ii) of the Act was upheld. In Ashoka Batteries v. Collector of Central Excise - 1990 (50) E.L.T. 375 (Tribunal), the view taken in an unreported decision of the Tribunal to the effect that duty collected from customers and not payable to Government was not to be excluded from the assessable value was followed. In Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise - 1993 (63) E.L.T. 460 (Tribunal), it was held that it is the effective rate of duty alone that is to be deducted from the price and where the assessee collects duty at the tariff rate, Department is justified in revising the assessable value while granting refund treating the difference in tariff rate and effective rate of duty as profit and adding the same to the assessable value. 5. A careful examination of the said decisions of the Tribunal excepts in VST Industries case, Sanghi Beverages Pvt. Ltd. and Vijayawada Bottling case shows that the particular controversy whether the amount of refund should be treated as part of the wholesale price or the assessable value was not considered and what was considered was whether amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise duty element has to be deducted from the price (apart from other admissible deductions) in order to determine the assessable value under Section 4 of the Act. In the present case, originally assessable value had been arrived at by including freight charges in the assessable value and excise duty paid on the basis of such assessable value. Assistant Collector found that freight charges could not have been included in the assessable value and hence the excise duty on the freight element should be refunded. If X was the freight charges erroneously added to the assessable value, Assistant Collector calculated excise duty on X and refunded such amount. Collector (Appeals) gave two directions, one to direct verification of expenses incurred o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Metal Box India Ltd. case cannot be regarded as laying down good law. 8. It is contended for appellant that Collector (Appeals) was in error in setting aside the order of the Assistant Collector. We do not agree. In the light of the two defects in the order of the Assistant Collector noticed by Collector (Appeals), the former s order required to be set aside. In effect, he ordered remand of the case to verify the aspect already indicated and work out the correct amount to be refunded. This was also justified. 9. In the result, we modify the order passed by the Collector (Appeals) by directing that the duty element on the deductible freight charges should be added not to the assessable value but to the wholesale price and thereafter t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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