Custom, Excise & Service Tax Tribunal
Albright &Amp; Wilson Chemicals India ... vs Cce Thane I on 24 August, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
Appeal No. E/580 to 584 & 247/2010
(Arising out of Order-in-Appeal No. VSK/28 to 37/Th-I/09 dated
20.11.2009 passed by Commissioner of Central Excise (Appeals),
Mumbai)
Albright & Wilson Chemicals India Ltd. Appellant
Vs.
Commissioner of Central Excise, Respondent
Thane I Appearance:
Shri D.B. Shroff, Advocate for appellant Shri A.B. Kulgod, Asst. Commr (AR) for respondent CORAM:
Hon'ble Mr. S.K.Mohanty, Member (Judicial) Hon'ble Mr. P. Anjani Kumar, Member (Technical) Date of Hearing : 20.08.2018 Date of Decision : 24.08.2018 FINAL ORDER NO...A/87155-87160/2018 Per: P. Anjani Kumar The issue involved in this case relates to the inclusion of loading and levelling cost incurred by the appellants' buyer i.e. M/s N.S. Shetty in transporting gypsum further to his buyers during the period August 2004 to October 06.
2. Briefly stated facts are that for the period upto August 2004 the appellants manufactured phosphoric acid and have 2 Appeal No. E/247, 580 to 584/2010 engaged M/s N.S. Shetty as their contractor; the contractor collects the slush from chute, transports the same to yard where it is levelled and further transports to buyers. The contractor was issued work orders from time to time stating the quantity and the rate. All transportation, loading, levelling etc, within the factory was taken care of in the said rate. The appellants used to enter into sales agreement with the cement companies on an as-is-where-is-basis. The said agreement specifically stated that the transportation, loading and unloading would be by the customer.
2.1 Since 2002, Excise authorities took the view that the appellants had cleared gypsum without including
(i) Loading and levelling charges paid by the buyer to M/s N.S. Shetty,
(ii) the amount incurred in shifting gypsum from the factory to the appellants yard.
2.2 The department placed reliance on the judgement of the Hon'ble Supreme Court in the case of Indian Oxygen Ltd v Collector - 1988 (36) ELT 723 (SC) and have issued ten show- cause notices covering the period March 1997 to July 2004 which also covers the period after 1st July 2000 consequent to the introduction of new Valuation Rules. The demands were confirmed along with penalty on the appellants as well as the 3 Appeal No. E/247, 580 to 584/2010 contractor. On an appeal made by the appellant, this Tribunal in the case of appellants reported at 2007 (214) ELT 313, have set aside the penalty and demands holding that the reliance on the aforesaid Hon'ble Supreme Court judgement was mis-placed as the issue in that case involved had a question of deduction of loading charges incurred within the factory from the price of goods whereas in the present case the facts were different; there is no doubt that the appellants incurred the expenses for the above purpose and these expenses were taken into account while selling the gypsum to the buyers. The contractor has undertaken the work in terms of contract between him and the buyers of the appellant, by no stretch of imagination it could be considered as an additional consideration received by the appellants. The above decision of the Tribunal has been considered and agreed upon by the Larger Bench of the Tribunal in the case of CCE v. Supreme Petro Chem Ltd. - 2009 (240) ELT 38 (Tri.LB).
2.3 The only charge that was made during the impugned period i.e. August 2004 to October 2006 was that the gypsum was no longer sold to the cement manufacturers but was sold by the appellants to the contractor himself on as-is-where-is-basis. The contractor further sold the cement to the buyers i.e. cement companies. The department has again issued five show-cause notices covering the period August 2004 to October 2006 for 4 Appeal No. E/247, 580 to 584/2010 aggregating the amount of Rs.21,53,355/- while proposing to levy penalty. The show-cause notices were confirmed by the Asst. Commissioner vide different orders dated 31.08.2006 and March 2007. The appellants preferred an appeal before the Commissioner (Appeals) submitting that the issue was no longer Res Integra; it was for the department to show that any amount paid to M/s N.S. Shetty for loading and unloading was received by the appellants or that there was a flow back; there was no such evidence. Commissioner (Appeals) has upheld the order of the lower authority. Hence these appeals.
3. The learned Counsel for the appellants has submitted that the judgment of the Tribunal in appellants own case (supra) which covers the period after 1st July 2000 is squarely applicable; it is manifestly specious attempt to distinguish the case in view of the case of Indian Oxygen Ltd (supra). The Tribunal in the case of Supreme Petro Chem Ltd. (supra) discussed the issue of inclusion of such loading charges and held that the matter to be no longer Res Integra. In the case of Indian Oxygen Ltd (supra) the issue dealt was recovery of the loading charges by the assessee and request for deduction of the same in the value. In the present case, no amount has been recovered either directly or indirectly by the appellants other than the value of gypsum sold to the contractor i.e. M/s. N.S. Shetty. Therefore, the learned Counsel submitted that the issue 5 Appeal No. E/247, 580 to 584/2010 being squarely covered by the decision of the Tribunal in their own case and upheld by the Larger Bench.
4. On the other hand, learned D.R has relied upon the finding in the order-in-original and order-in-appeal.
5. Heard both sides and perused the records.
6. We find that as submitted by the learned Counsel for the appellants, the issue is squarely covered by the decision of this Tribunal in the appellants own case which was also upheld by the Larger Bench of this Tribunal in i.e Supreme Petro Chem Ltd. (supra). We find that the factual position, in the period covered by earlier show-cause notices is quite different from the present show-cause notices; whereas, in the previous set of show-cause notices the appellants were paying certain amounts to the contractor for undertaking transportation, loading and levelling of gypsum which was ultimately sold to cement manufacturer. In the instant case, the appellants are selling the gypsum as-is-where-is-basis to the contractor i.e. M/s. N.S. Shetty himself who is selling the same to the cement manufacturers. In the instant case, therefore, no expenses are incurred by the appellants in the sale of cement to the contractor. Therefore, there is no question of includibility of such amount in the assessable value of cement sold by the 6 Appeal No. E/247, 580 to 584/2010 appellants to M/s N.S. Shetty, it is pertinent to note that the earlier set of show-cause notices which also covered the part of period which is after 01.07.2000 where the appellants themselves have incurred such expenses were held to be non- includable in the assessable value. The present set of facts is more so placed favourable to the appellants on this count. No expenses are incurred by the appellants. As no flow back is alleged or evidenced, proposal to include the charges incurred by the buyer in respect of gypsum sold by the appellants to the contractor is by no stretch of imagination legally tenable.
7. In view of the above, the appeals are allowed with consequential relief, if any.
(Order pronounced in Court on 24.08.2018)
(S.K.Mohanty) (P. Anjani Kumar)
Member (Judicial) Member (Technical)
nsk