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TMI Blog2004 (12) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... and trade discounts is admissible, the demand of duty was conformity in toto on the ground that while calculating deduction of equalised freight, they had included an amount of sales tax; that on Appeal, the Commissioner (Appeals), under Order-in-Appeal No. 7/2001, dated 9-1-2001, confirmed the demand by holding that turn over tax and sales tax are two different items and deductions of sales tax is not admissible; that the Tribunal, after clarifying that sales tax referred in the Order is in fact turn over tax, held, vide Final Order No. 219/2001-A, dated 23-5-2001, that issue of admissibility of deduction on all the accounts had been conceded by the Department; that in view of non-quantification of amounts pertaining to three deductions, the Tribunal had remanded the matter to the Adjudicating Authority. 2.2He further mentioned that the Joint Commissioner under Order-in-Original No. 218/2002, dated 28-10-2002 [Appeal No. E/l 341/04-NB(A) dropped the demand of duty except on following accounts : (a) As per documents submitted by the Appellants for the year 1996-97, deduction per unit came to be Rs. 170.34 whereas they had claimed Rs. 180/- per unit. The Adjudicating Authority di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of total freight expenses; that though the Revenue had not questioned allowance of deduction of Turnover tax in its Appeal, the Commissioner (Appeals) has set aside the entire Order-in-Original dated 28-10-2002 which is contrary to law. He submitted that penalty is not imposable at all as there is not even an iota of evidence to show that there was any contravention of any provision by the Company attracting Rule 173Q(l) of the Central Excise Rules, 1944. 4.Regarding two demands of duty (Rs. l, 13,220 and Rs. 2,57,040), the learned Advocate submitted that duty can not be demanded on the ground that actual expenditure was less than the equalised freight and turn over tax; that the Tribunal in Geep Industrial Syndicate Ltd. v. C.C.E., 1998 (104) E.L.T. 375 (T) has held that the contention that the turnover tax and octroi which had not been collected from the buyers need not be deducted is an erroneous approach. He also relied upon the judgment in the case of Baroda Electric Meters Ltd. v. C.C.E., 1997 (94) E.L.T. 13 (S.C.) wherein the Supreme Court has confirmed the availability of deduction on account of equalised freight. 5.The learned Advocate mentioned that in Appeal No. E/l7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jointly; that they had also produced Certificate of Auditors conforming per unit expense on account of equalised freight and turnover tax separately; that deduction can also not be denied on the ground that the Company had taken into account total expenses incurred in different units of the Company in view of the Board's Circular No. 287/3/97, dated 14-1-1997. 7.1Countering the arguments, Shri S.C. Pushkarna, learned Departmental Representative, reiterated the findings as contained in the impugned orders. Regarding the Appeal filed by Revenue against Order-in-Appeal No. 1269/2003, dated 29-12-2003, the learned Departmental Representative mentioned that though the Commissioner (Appeals) has reached a finding that the issue raised by the Department that the deduction on account of freight of Rs. 824.50 lakhs might be including the freight of other goods seems to be tenable, he had not passed any orders regarding re-quantification of the duty; that once the issue raised by the Department has been accepted by the Commissioner (Appeals) he should have ordered for re-quantification of duty or requantified the demand herself. 7.2The Revenue has also preferred Appeal against Order-in-App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s before him." The Tribunal thus observed that "the authorities below have not entered a finding on the quantum of regional trade discount claimed by the manufacturer, nor did they enter a finding on the turnover tax element claimed by the manufacturer by way of deduction. Same was the position of the quantum of freight (transportation charges incurred for delivery of the goods from depot to customer) quantified. The Tribunal, therefore, remanded the matter "to the jurisdictional officer to deal with the issue afresh on the basis of materials produced by the manufacturer." 10. It is thus evident that the Tribunal has remanded the matter for quantifying the quantum of regional trade discount, freight and turnover tax only. The Adjudicating Authority (Joint Commissioner) relying on judgment of the Supreme Court in Bombay Tyres International and various decision of the Tribunal reached the conclusion that the deductions in question are legally admissible. He, thereafter examined the certificates of the Chartered Accountant and confirmed the demand of Rs. 5,70,760/- only. The Company has not challenged Rs. 2,00,500/- out of the confirmed demand of duty before us. Thus we uphold the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere on account of refrigerations only or it included the freight incurred on other goods cleared by the Company. The learned Advocate has submitted that the Adjudication Order dated 28-10-2002 categorically shows that for calculating expense on account of freight all the products manufactured by the Company has been taken into account which is permissible in view of the decision of the Tribunal in Indian Explosives Ltd. [1989 (40) E.L.T. 190 (T)] wherein the Tribunal has held that deduction on account of freight and taxes actually paid on six categories of products manufactured by the Appellants should be allowed pro-rata on average basis. Further reliance has been also placed on the Board's Circular dated 14-1-1997 which clarifies that "in multi product and multi location factories if equalised freight can not be worked product-wise, the principle laid down by the CEGAT in above said decision may be followed to work out equalised freight/average freight for the purpose of Section 4(2) of the Central Excise Act." In view of this, the Adjudicating Authority has rightly allowed the deduction of the freight, turnover tax and trade discount. Further no penalty was also imposable on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved is whether Rs. 61/- out of Rs. 145/- per refrigerator claimed as deduction represents turn over tax. The matter has been decided on remand by the Tribunal vide Final Order No. 167/2001-A, dated 11-4-2001. The Assistant Commissioner disallowed the deduction of Rs. 61/- on the ground that "the amount of sales tax can not form a part of equalised freight and as such its inclusion for arriving equalised freight is erroneous. I also find that Sales Tax and Turnover Tax is not same. The Sales Tax is chargeable on the value of goods which is inclusive of excise duty therefore it is not admissible. The Commissioner (Appeals) has also rejected their Appeal merely by saying that sales tax borne by the Company is not admissible. On the other hand, it is the contention of the Company that they had paid the turnover tax in certain states and produced the documentary evidence. In this Appeal also, we find that the direction contained in Final Order No. 167/2001/A, dated 11-4-2001 has not been complied with. The Tribunal has clearly held therein relying on the judgment in Bombay Tyre International Ltd. that turn over tax is admissible deduction from the price. The matter was remanded onl ..... 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