Customs, Excise and Gold Tribunal - Mumbai
Universal Luggage Mfg.Co. Ltd. vs Collector Of Central Excise on 7 September, 1993
Equivalent citations: 1994(51)ECR306(TRI.-MUMBAI)
ORDER R. Jayaraman, Member (T)
1. For hearing the applicant's appeal on merits, they are required to deposit Rs. 21,33,948/- towards duty vide Order in Appeal No. A-67/93 dated 29.4.1993.
2. Shri C.S. Lodha, the learned advocate pleads that all the three show cause notices are within time. However, on merits they have got an excellent case. They are claiming deduction only in respect of expenses incurred at the depots. These expenses are post clearance and therefore not includible in the assessable value. They also claim deduction towards interest on consumables. He referred to the decisions of the Special Bench reported in Guljag Chemicals & Plastics Pvt. Ltd. v. Collector of Central Excise and Union of India v. Duphar Interfran Ltd. 1987 (27) ELT 599 : 1984 ECR 1443 (SC) : ECR C 709 (SC). He therefore pleads that the demands in respect of these post clearance expenses are not sustainable. Shri Lodha also contends that the firm has incurred a loss of Rs. 6.2 crores as against the net worth of Rs. 4.37 crores.
3. Shri Jain however contends that there are sales at the factory gates. Hence these deductions may not be called for. Moreover, the type of expenses incurred are salaries to the staff, rent, rates, taxes and if they are clearing the goods to depots, it is only as a sales promotion measure and hence these charges are to be included.
4. After hearing both sides, with regard to the interest receivable, there are judgments in their favour as cited by the learned advocate. With regard to the other expenses, whether they are sales promotion or otherwise, especially when there are ex -factory sales at the factory gates, these are required to be gone into. Having regard to the financial position and the arguable case in their favour we direct the applicants to furnish a Bank guarantee for a sum of Rs. 10 lakhs within a period of 8 weeks from the date of communication of this order and reporting compliance within 9 weeks failing which this appeal is liable to be dismissed. On furnishing the Bank guarantee, there shall be stay and waiver of recovery of the duty amount.