Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise, ... vs K.S.B. Pumps on 11 September, 2001
Equivalent citations: 2002(79)ECC198
JUDGMENT
Jeet Ram Kait
1. This is a revenue appeal filed against the Order-in-Appeal No. 202 to 209 (CBE) dated 28.5.92 passed by the Commissioner (Appeals) Trichy.
2. Revenue has filed the appeal on the ground that respondents had not included the notional interest accrued on the advances received from their customers from whom they have obtained deposits and therefore differential duty on this count on the notional interest was required to be paid.
3. Ld. DR Shri Soundararajan has reiterated the submissions made in the appeal and has requested that the case may be remanded back to the original authority to examine whether there is depression in the value as a result of such accrual of the notional interest on the deposit/securities.
4. Shri T.S. Muralikrishnan, Asst. Manager (Finance), who is an authorized representative of respondents, has submitted that all these cases pertained to a batch decision and they have already been decided by the Commissioner (Appeals) as well as by the Tribunal in favour of other appellants. They have requested that the appeal of the Revenue should be dismissed as it is not maintainable in view of the position rendered by this tribunal and other benches through out the country.
5. We have carefully considered the submissions made by both sides and find that large number of petitions have been decided by us as well as by various other co-ordinate benches. The findings given by the Commissioner (Appeals) in para-5 & 6 are extracted herein below:-
5. The appellants have claimed that the advance received was only a very small percentage of the contracted price and part payment of final price and was meant only as a security deposit to avoid any loss in the event of cancellation of orders and does not contribute to the working capital. They have also submitted that the items produced by them are tailor made items as per specific requirements of the customers and the contracts finalised as per the tender documents and that the advance is taken as a notional guarantee so that they could proceed in the matter without any apprehension of the withdrawal of orders at any intermediate stage. They have also stated that the advances cannot be equated to borrowings since the price is fixed first based on the cost of production and profit without taking into account the advance. It is only after acceptance of the same that a portion is received as advance and so it is not as if the advance is received first and the price fixed later in consideration or in relation to the advance realised. They have also questioned the AC's order on the cash inflow as it is not clear to them how the adjustment of the advance received in the price could be considered as cash inflow. Further it is argued that in the absence of any evidence particularly without considering the advance vis-a-vis the total turn over of the company, the raw material purchased etc. the AC could not come to the conclusion as per the impugned orders. They have also submitted that there are sales to customers from whom no advance is taken but the price is the same. They have also cited order No. 60/96 dated 29.3.96 of the Commissioner of Central Excise, Coimbatore, wherein a similar issue has been decided in favour of the assessee dropping the show cause notice proceedings.
6. In the light of the above, I have no reason to change my views taken in the earlier orders-in-appeal referred to supra. I therefore hold that the Assistant Commissioner's orders here cannot be sustained in law in the absence of any evidence brought on record to show that the advance taken by the appellants had, in fact, depressed the price or that the appellants had derived benefit by receipt of such advance, particularly in the absence of quantification thereof. So the impugned orders do not survive in law in the light of the judicial pronouncements as above and the demands confirmed have to be set aside.
6. We confirm the finding recorded by the Commissioner and reject the Revenue appeal in view of Apex Court judgment in the case of VST Industries v. CCE Hyderabad reported in 1998 (97) ELT 395 (SC) which has been applied by this Bench as well as by co-ordinate benches through out the country.
(Pronounced & Dictated in Open Court)