Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Sam Industrial Pumps Co. Pvt. Ltd. on 3 September, 2003
Equivalent citations: 2004(113)ECR273(TRI.-CHENNAI)
ORDER Jeet Ram Kait, Member (T)
1. All these nine appeals filed by Revenue arise from a common Order-in-Appeal Nos. 435 to 442/96 (CBE) dated 21.6.1996 by which the learned Commissioner (Appeals) has set aside the order of the original authority and allowed the respondent-assessee's appeals.
2. Aggrieved by this order, the Revenue has come in appeal on the ground that the money does not come free in the market. In no business money is kept idle either. Therefore, when the fact of interest free deposit is proved, the consideration accruing to the persons receiving the deposit is proved ipso facto and, therefore, the burden shifts to the assessee to prove that the extra consideration accruing from the buyer of the goods has not influenced the price. Revenue has also relied on the Apex Court's judgement in the case of Metal Box India Ltd by which the Hon'ble Apex Court had held that interest on advances are to be included in the assessable value.
3. Heard Ld. DR Shri A. Jayachandran who, while reiterating the grounds, has submitted that the assessee has not kept the advance received from the customer in a separate account and has not kept the interest earned from such deposit to the account of the buyer. Under these circumstances the interest accrued on the advances has to be included in the assessable value.
4. None appeared on behalf of the respondent despite service of notice today.
5. We, therefore, proceed to decide the case on merits. We have considered the appeal memorandum and the grounds of appeal and the submissions made by the learned DR during the course of hearing and after going through para-3 of the Order-in-Appeal, we find that it has not been established that the receipt of advance has resulted in depreciation of the price and, therefore, notinal interest on such advances cannot be taken into account while determining the assessable value under Section 4 of the Act. For better understanding, we extract para-3 of the order passed by the learned Commissioner (Appeals) as under:
3. It is seen that the issue involved in all these appeals has been covered by decision referred to above, wherein, 1 have observed as follows:
I have considered a number of appeals on this issue and have been consistently holding that unless it is established that the receipt of the advances has resulted in depreciation of the price, the notional interest on such advance cannot be taken into account while determining the assess above value under Section 4. The lower authority would no doubt state that the adavances received is utilised as working capital, that but for receipt of these advances the appellants would have borrowed funds from market and interest paid would have automatically entered into the determination of price. However a mere statement alone is insufficient. It has to be established that the buyers who paid advances were special category of buyers and that a specifically low price had been charged to them. Such specific findings are lacking herein. Further, I also find from the impugned order that the appellants have contended before the lower authority that the price is the same irrespective of the fact whether the customer pays advances or not and the Assistant Commissioner has not given any findings on the aspect. Having regard to the above factors, the impugned orders cannot be sustained.
Adopting the above ratio, I set aside the impugned orders and allow all the appeals.
6. We find from the extract portion that the learned Commissioner has found that the price has remained same irrespective of the fact whether the customer pays advance or not and the Asst. Commissioner has not given any finding on this aspect. We also decided number of cases in the past against Revenue and in favour of assessee. Some of this Bench decisions are listed below for reference:
1. CCE Coimbatore v. Universal Heat Exchangers Ltd. and Ors. vide final order No. 737 to 761/2001 dated 24.5.2001
2. CCE Coimbatore v. GEC Alsthom and Ors. vide final order No. 806 to 840/2001 dated 1.6.2001.
3. Final order No. 849 to 859/2001 dated 4.6.2001 in the case of CCE Coimbatore v. K.S.B. Pumps
4. Final Order No. 878 to 893/2001 dated 6.6.01- CCE v. Sservall Engg. Works (P) Ltd.
5. CCE, Coimbatore v. Servall Engg. Works (P) Ltd. and Ors. vide final order No. 898 to 911/2001 dated 7.6.2001.
7. Respectfully applying the ratio laid down in our earlier decisions on the very issue, we reject the appeals filed by Revenue.
(Dictated and pronounced in open Court)