Customs, Excise and Gold Tribunal - Delhi
Mecneill And Magor Ltd. vs Collector Of Central Excise on 20 June, 1986
Equivalent citations: 1986(9)ECC105, 1986(8)ECR501(TRI.-DELHI), 1986(25)ELT556(TRI-DEL)
ORDER K.L. Rekhi, Member (T)
1. On hearing both sides, we observe that the appellants are agitating for exclusion of the following two sets of costs which the lower authorities have added to the value of their forklift trucks for the purpose of assessment of central excise duty:-
I. Cost of 1. Battery and its initial charging. 2. Battery charger 3. Attachments and accessories such as load back rest, extra set of lights, ram attachment, crane attachment etc. II. Cost of 1. Packing 2. Forwarding charges or loading/unloading charges. 2. The period relevant to the controversy is from 15-10-1982 to 31-7-1983.
3. We find that the point at issue for cost category I above stood settled in the appellants' favour by the following orders-in-appeal passed by the Appellate Collector/Collector (Appeals) in the appellant's own case:-
(1) Order-in-appeal No. 262/Cal./82 dated 31-3-1982 (for battery and battery charger).
(2) Order-in-appeal No. 269/Cal./83 dated 23-2-1983 (for battery).
(3) Order-in-appeal No. 462/Cal./83 dated 30-3-1983 (for accessories).
We are informed that no appeal was filed by the department against an of the aforesaid orders-in-appeal. These orders, therefore, became final.
4. We asked the learned representative of the department as to what authority or jurisdiction the Assistant Collector, a lower functionary, had to re-open the issue in respect of cost category I and decide it contrary to the aforesaid orders-in-appeal. The answer given to us was the same as given by the Assistant Collector to the appellants (when they had asked the same question in reply to the impugned show cause notice dated 4-6-1984): that the Assistant Collector was competent to re-open the issue in the light of paragraph 49 of the Supreme Court judgment in the case of M/s. Bombay Tyre International Ltd. (1983 ELT - 1986) which became available after the passing of the ' aforesaid Orders-in-appeal and the remand order dated 30-5-1984 of the Calcutta High Court on the appellants' writ petition which, directed the authorities to decide the appellants' valuation dispute in accordance with the principles laid down by the Supreme Court. On careful consideration of the matter, we do not agree with the department's view. Paragraph 49 of the Supreme Court judgement aforesaid related to certain deductions from value claimed by the assessee parties under the heading "post-manufacturing expenses" (8 individual cost elements enumerated in paragraph 47 of the Supreme Court judgment ). The dispute in the appellants' writ petition before the Calcutta High Court also related to deduction of "post-manufacturing expenses and/or selling expenses and/or selling cost and/or selling profit." Neither the Supreme Court judgment nor the Calcutta High Court's remand order even remotely touched upon the issue whether the articles listed under cost category I above could be considered parts or components of forklift trucks so as to justify inclusion of their value in the assessable value of forklift trucks. The Assistant Collector's action in seeking to revise the orders-in-appeal passed by a superior authority was, therefore, without the authority of law and jurisdiction. Without cogent reasons,, the department could not be allowed to re-open a settled issue [1982-ELT-1 (Bombay) - Camlin Private Ltd., v. U.O.I.]
5. The appellants cited a number of rulings in support of the merits of their case for exclusion of cost category I:
(1) Batteries are indispensable for functioning of the transistor radios. Nevertheless they are not part of the transistors. Same is the position with the arc carbons vis-a-vis the cinematograph equipments [38 STC 198 (Kerala)].
(2) A battery cell which is necessary for the use of a transistor cannot be said to be a part of the transistor itself. Leather cases for transistors are accessories to transistors. [40 STC 169 (Madras)] (3) Typewriter ribbon is an accessory and not a part of the typewriter [39 STC 8 (SC)] (4) Tool box, jack, angle supporter or chains are only in the nature of accesssories and cannot be characterised as components or integral parts of a trailer 1979-ELT-J145 (Gujarat) (5) Hour meters and wheel weights are not essential parts of tractors 1985 (22) ELT-780 (Bombay) In the alternative, the appellants wanted set off/exemption in terms of Notification No. 201/79-CE dated 4-6-79 and 118/75-CE dated 30-4-75. However, in the view we have taken in the preceding paragraph, it is unnecessary for us to go into the merits of the matter.
6. Coming now to the cost category II, we find that forklift trucks can hardly be considered a commodity which is sold in packaged condition. The appellants' own practice stated to be is that for deliveries to near-by customers, the forklift trucks, in unpacked condition, are loaded on lorries and transported. It is only for long distance deliveries by road/rail that crating is done to avoid heavy jerks and damage to the forklift trucks during transit. It is evident, therefore, that such crating is done solely for facilitating smooth transport of the forklift trucks. Hence, the cost of packing is not includible in the assessable value of forklift trucks [1985 [22] ELT - 306 (SC) - UOI and Ors. v. Godfrey Philips India Ltd., and Ors.]
7. So far as loading/unloading or forwarding charges are concerned, the matter stands settled by paragraph 49 of the Supreme Court judgement in the case of Bombay Tyre International Ltd. All such charges incurred upto the point of loading the forklift trucks for delivery at the factory gate are includible in the assessable value. Such charges, if any, incurred after the factory gate stage are an element of cost of transportation and hence not includible.
8. In the light of our above findings, the assessable value should now be re-determined by the Assistant Collector and consequential relief given to the appellants. The appeal is disposed of accordingly.