Customs, Excise and Gold Tribunal - Delhi
Collector Of C. Ex. vs Indian Oxygen Ltd. on 8 July, 1987
Equivalent citations: 1989(41)ELT610(TRI-DEL)
ORDER K. Prakash Anand, Member (T)
1. There are seven appeals filed by the Collector of Central Excise, Guntur and six appeals filed by M/s. Indian Oxygen Ltd. against Orders-in-Appeal passed by the Collector of Central Excise (Appeals), Madras. Since these appeals are against the same order of Collector (Appeals), Madras they have been heard together and are being disposed of by this common order.
2. Heard Shri V.M. Doiphode, S.D.R., for the department and Shri S. Ramasubramaniam and Shri Krishna Srinivasan, Advocates for M/s. Indian Oxygen Ltd., Visakhapatnam.
3. M/s. Indian Oxygen Ltd., Visakhapatnam are the manufacturer of oxygen and D.A. Gases. They sell the said gases from their factory at Visakhapatnam and from their depot/service centres at Vijayawada, Rajamundry, Vadlapudi, Jeypore and Damanjodi. They sell their product to Government undertakings as per the rates determined by D.G.S. & D., New Delhi. In respect of other buyers they sell their product at various prices on slab basis. This slab basis is related to what the manufacturers call a quantitative discount. The department has undertaken verification of the prices charged by the manufacturers at their depots and service centres. These were found to be much more that the prices indicated in the approved price list. The manufacturers did not furnish to the department quantities of their product which were sold from their depots/service centres.
4. The department has also found that M/s. Indian Oxygen Ltd. were charging from their buyers, apart from the declared price list, the following :
(i) Delivery and Collection charges (where applicable)
(ii) Cylinder deposit
(iii) Rentals The department's case is that these are additional charges which should form part of the assessable value.
5. The department also observed that in the price list submitted by the manufacturers in respect of clearances from their Vijayawada depot they claimed abatements on account of freight and handling charges, in respect of which they did not produce any evidence. The department, therefore, held that no such deduction was admissible.
6. The manufacturers have admitted that separate prices are indicated for the same goods in respect of Visakhapatnam factory which is the place of manufacture and Vijayawada, a place about 400 Km. away which is only a depot. It is explained that the difference in the prices was in consideration of special delivery and collection charges which were admittedly incurred for transporting the goods from Visakhapatnam to Vijayawada.
7. M/s. Indian Oxygen Ltd. have for inexplicable reasons not come forward to offer concrete evidence of actual freight charges etc. They have taken the stand that since the ex-factory prices for the goods are available they are entitled to assessment in terms of those prices. It is submitted that the department is not within its jurisdiction to ignore the available ex-factory price and to assess the manufacture as per ex-depot prices. It is emphasized that it is nobody's case that ex-factory prices are not known since the very same contract furnishes the ex-factory prices.
8. The learned Advocate relies on the following case law :
(1) 1987 (27) ELT 482 - Indian Oil Corporation Ltd. v. CCE, Calcutta. (2) 1987 (27) ELT 728 - Usha Martin Industries v. C.C.E., Patna. (3) 1985 (22) ELT 61 - C.C.E., Indore v. Premier Oxygen & Acetylene Ltd., Gwalior.
9. The learned S.D.R. emphasizes that collection, loading and unloading charges are really handling charges which are not excludible while arriving at the assessable value. As regards freight, it is submitted that the contract itself specifies different prices from different points and it was for appellants to claim deductions of freight on the basis of evidence which they have failed to produce. Therefore, their claims on this ground ought to be rejected. Finally, as regards the element of interest, it is submitted that it is only additional consideration which is flowing to the manufacturer for the sale of the goods and, therefore, it should constitute a part of the assessable value.
10. The facts of the case and the submissions made before us have been carefully considered. So far as the question, whether the firm Indian Oxygen Ltd. are liable to pay duty on their goods ex-factory or ex-depot is concerned, the principle of it has come in for consideration of this Tribunal before, that is, in the case of Usha Martin Industries, Patna (supra). It was held by this Tribunal that sale price ex-depot cannot be the basis of assessable value when wholesale price is available at the factory gate. In that case also, the facts were that an arrangement had been arrived between the manufacturers and the Department to the effect that stock transfers to depots would be initially assessed on D.G.S.&D. rate contract price and subsequently the assessment would be revised if the actual sale prices happened to be higher. It was observed by this Bench in that matter that when 60% of the appellant's goods were sold in wholesale at the factory gate, the wholesale cash price/normal price was ascertainable at the time and place of removal itself; and, therefore, it was not lawful to assess the goods on the basis of subsequent actual sale price, ex-depots which was neither the price at the time of removal nor at the place of removal. Nothing that the rate contract price was applicable only to D.G.S.&D. and Government Departments, it was observed, that there were other sales also at the factory gate and there was no reason why the wholesale price represented at the factory gate should not constitute the basis for assessment of the goods at the time of removal from the factory.
11. The same issue had come up before this Bench in the case of Indian Oil Corporation Ltd. (supra) where it was held that valuation and assessment have to take place at the time of removal of the goods from the factory. The normal price at which such goods are ordinarily sold was ascertainable at the gate of the factory. Accordingly, such price at the place of manufacture alone should be the basis for valuation for the purposes of charge of duty.
12. In the present matter, we have to reiterate the view consistently taken by this Tribunal in such cases. We filnd that the price ex-factory is ascertainable. Assessments should, therefore, be in terms of this price.
13. In the light of the foregoing discussion, the issue of deduction of rate from the prices ex-depots does not survive for our decision. However, we would like to observe here that if the ex-factory prices were not ascertainable and the goods were to be assessable ex-depot, then it would be for the manufacturer to claim on the basis of actual evidence, deductions admissible, as per the provisions of the Act.
14. Coming now to the other elements of additional charage, it is observed by us that insofar as delivery and handling charges ex-factory are concerned, these must constitute a part of the assessable value itself as they make up the price of the goods ex-factory. Such charges, therefore, will have to be added to the price declared by the manufacturer.
15. There are two other points. As regards charge on account of rental for the cylinders and the interest which accrues on account of deposit receipts for the supply of gases in returnable cylinders, we are not persuaded that either of these charges is related, to the cost of manufacture of the goods as such. In the case of Premier Oxygen and Acetylene Co. (P) Ltd., Gwalior (supra) this Bench has already held that rental charges for retention or holding of gas cylinders are not includible massessable value. We fully endorse this view and we also hold that any interest accruing on deposits received for such gas cylinders cannot constitute a part of assessable value.
16. The 13 appeals before us are disposed of in the foregoing terms. The Assistant Collector will refix the assessable value as intimated. Consequential reliefs, if any, will follow.