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TMI Blog2006 (6) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... d JDR appeared for the Revenue. 3. The learned Advocate pointed out that in the above mentioned Final Order, the Tribunal following decision of the Apex Court in the case of Bombay Tyre International Ltd. reported in 1983 (14) E.L.T. 1896 (S.C.) has allowed deduction towards equalized freight. However, the Tribunal upheld the impugned order in so far as it relates to the inclusion of other expenses. The other expenses are the following :- (a) Cost of freight incurred at depots; (b) Unloading at depots (c) Reloading at depots (d) Unloading at Customer s site (e) Freight or hamali charges in case of supplied by reickshaw or manual labour; (f) Cost of installation at Customer s site by assembling/checking of the furniture; (g) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord. He brought to our notice the Board s Circular No. 194/28/96-CX dated 29-3-96 issued under Section 37B of the Central Excise Act regarding deduction of interest. As per the clarification, the deduction of interest on receivables cannot be permitted from the assessable value of the excisable goods if the interest is not charged over and above the sale price of such goods. The backing for this stand is available in the Apex Court reasoning for excluding interest on receivables. Mainly such amounts are received subsequent to the sale of excisable goods. If the assessees are claiming that interest cost are inbuilt in the price, they cannot be deducted from the whole sale price because by their very nature this cost would be a part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of the removal of the article chargeable with duty from the factory or other premises aforesaid. The new S. 4 provides by sub section (2) that where the price of excisable goods for delivery at the place of removal is not known and the value is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery has to be excluded from such price. The new S. 4 also contains sub section (4)(d)(ii) which declares that the expression value in relation to any excisable goods, does not include the amount of the duty of excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that to determine the value of an excisable articles, all expenses must be excluded which do not enter into the formula of manufacturing cost plus manufacturing profit. This follows from the principal plank of the assessees case that the value must be confined to the manufacturing cost, and the manufacturing profit. For, it is said, that if the deductions claimed are allowed, the price would be brought down to the conceptual value. All post-manufacturing expenses are claimed from that perspective and within that context The other basis on which the claim proceeds, is that the price at the factory gate and the price at the depot outside the factory gate are identical. 49. We shall now examine the claim. It is apparent that for purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of wholesale trade is effected by the assessee through its sale organization at a place or places outside the factory gate, the expense incurred by the assessee upto the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted. But the assessee will be entitled to a deduction on account of the cost of transportation of the excisable article from the factory gate to the place or places where it is sold. The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place or places of delivery. 50. Where freight is averaged and the averaged freight is included in the wholesale cash price so that the wholesale cash price at any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations have been made :- 17. Before we proceed further, it is appropriate to correct a certain phraseological inexactitude : the principles enunciated in Bombay Tyre International do establish that the expression post-manufacturing expenses is not only legally inaccurate but is also likely to lead to some confusion. The said expression is associated with and an extension of the concept of manufacturing cost and manufacturing profit espoused by the learned counsel for the assessee in the said case but rejected by the Court. The expression post removal expenses may be more apt expression but even this expression may not be quite a correct expression. As pointed out specifically in Bombay Tyre International, there are quite a few char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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