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TMI Blog2019 (4) TMI 1412X X X X Extracts X X X X X X X X Extracts X X X X ..... JAY KUMAR, MEMBER (TECHNICAL) Shri N. K. Chowdhary, Adv. for the Appellant (s) Shri H. S. Abedin, A. C. (A.R.) for the Revenue ORDER PER SHRI P. K. CHOUDHARY Briefly stated the facts of the case are that the appellant was manufacturing HDPE Silver Can and parts, as classifiable under Chapter 39 76 of the First Schedule to the Central Excise Tariff Act, 1985. Show Cause Notice dated 24/03/2005 was issued alleging that the appellant assessee raised commercial invoices/bills to their clients whereby they realized packing and forwarding charges over and above assessable value shown in their Central Excise invoices. It is the case of the department that on from 08/08/2003, the assessee started to include the aforesaid charges in the assessable value. Accordingly, allegation of evasion of Central Excise during the period from 1/04/2000 to 08/08/2003 amounting to ₹ 50,298/- has been charged upon the assessee. 2. The Adjudicating Authority confirmed the demand of ₹ 50,298/- along with interest and imposed penalty of equal amount under Section 11AC of the Central Excise Act, 1944. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the levy of excise duty can be only on the manufacturing cost and the manufacturing profit. It was contended before this Court, by relying on the decision of this Court in A.K. Roy and Another v. Voltas Limited - (1973) 3 SCC 503 = 1977 (1) E.L.T. (J177) (S.C.), that having regard to the character of the levy the measure must be restricted thereto. The contention was rejected by referring to a long line of precedents including those referred to herein above to hold that the levy of a tax is defined by its nature, while the measure of the tax may be assessed by its own standard. It is true that the standard adopted as the measure of the levy may indicate the nature of the tax but it does not necessarily determine it. The further view expressed in Bombay Tyre International Ltd. (supra) is that merely because excise is a levy on manufactured goods the value of the excisable article for the purpose of levy cannot be limited to only the manufacturing cost plus manufacturing profit. This Court went on to hold that a broader based standard of reference may be adopted for the purpose of determining the measure of the levy. Any standard which maintains a nexus with the essential chara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under the following heads should be made from the sale price in the following terms : We now proceed to the question whether any 48. postmanufacturing expenses are deductible from the price when determining the value of the excisable article. The old Section 4 provided by the Explanation thereto that in determining the price of any article under that section no abatement or deduction would be allowed except in respect of trade discount and the amount of duty payable at the time of the removal of the article chargeable with duty from the factory or other premises aforesaid. The new Section 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 Section 4 also contains subsection (4)(of)(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 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the expenses incurred on account of the several factors which have contributed to its value upto the date of sale, which apparently would be the date of delivery, are liable to be included. Consequently, where the sale is effected at the factory gate, expenses incurred by the assessee upto the date of delivery on account of storage charges, outward handling charges, interest on inventories (stocks carried by the manufacturer after clearance), charges for other services after delivery to the buyer, namely aftersales service and marketing and selling organisation expenses including advertisement expenses cannot be deducted. It will be noted that advertisement expenses, marketing and selling organisation expenses and after-sales service promote the marketability of the article and enter into its value in the trade. Where the sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the expenses 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 transpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of this Court in Acer India Ltd. (supra). The details need not detain us. Softwares which were duty free items and could be transacted as softwares came to be combined with the computer hardware which was a dutiable item for purposes of clearance. The Revenue sought to take into account the value of the computer software for the purposes of determination of transaction value with regard to the computer. This Court negative the stand of the Revenue taking the view that when software as a separate item was not dutiable its inclusion in the hard-disk of the computer cannot alter the duty liability of the software so as to permit the addition of the price/value of the software for the purpose of levy of duty. It is in the above context that the decision of this Court in Acer India Ltd. (supra) has to be understood. The observations made in paragraph 84 thereof to the effect that transaction value defined in Section 4(3)(d) of the Act would be subject to the charging provisions contained in Section 3 of the Act will have viewed in the context of a situation where an addition of the value of a non-dutiable item was sought to be made to the value of a dutiable item for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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