2007 (2) TMI 455 - AT - Central Excise

Summary

Issues:
- Deductions from retail price for determining assessable value of goods
- Dispute regarding deductions for installation, commissioning, training expenses, freight, insurance, and retailer's margin
- Relief granted by lower appellate authority
- Claim for deduction of retailer's margin
- Comparison with relief granted by Tribunal in a previous order
- Concessional stand taken by appellants
- Final decision on total deduction from retail price

Analysis:

The judgment by the Appellate Tribunal CESTAT, Chennai revolved around the deductions made by the appellants from the retail price of goods to determine the assessable value. The appellants, engaged in manufacturing data processing machines, had claimed deductions for installation, commissioning, training expenses, freight, insurance, and retailer's margin during the disputed period of November 1996 to August 1997. The original authority disallowed these deductions, leading to a demand for differential duty and imposition of penalties on the assessee.

The first appellate authority partially allowed the appeal, permitting deductions for installation, commissioning, and training expenses based on a Supreme Court ruling. Additionally, deductions for freight and insurance were also allowed. However, the claim for a retailer's margin deduction of 22.6% was reduced to 10% by the Commissioner (Appeals). The appellants also received relief from the penalty imposed.

Upon examination, the Appellate Tribunal found that the lower appellate authority had granted relief by allowing deductions for installation, commissioning, and training expenses, as well as for freight and insurance. However, the claim for a retailer's margin deduction of 20% was only partially accepted at 10%. The appellants' Chartered Accountant recommended a 13.4% deduction, and the appellants themselves initially sought a 13.4% deduction. They later referenced a previous order by the West Zonal Bench of the Tribunal, which allowed a 15% deduction for a different unit.

Despite the relief already granted, the appellants agreed to accept a total deduction of 15% from the retail price for determining the assessable value of the goods, considering the closure of their manufacturing unit in Pondicherry and their desire to avoid further disputes with the department. The Tribunal, acknowledging this concession, disposed of the appeals by allowing a total deduction of 15% from the retail price under all expense heads for the disputed period, entitling the appellants to consequential reliefs.

In conclusion, the judgment resolved the dispute by granting a total deduction of 15% from the retail price for determining the assessable value of the goods, based on the appellants' concession and the previous relief granted by the lower appellate authority.