1987 (4) TMI 165 - AT - Central Excise

Summary

Issues:
Whether delivery and collection charges, loading and unloading charges incurred by the appellants should be allowed as deduction from the sale price to determine the assessable value of industrial oxygen gas and acetylene gas sold in cylinders.

Detailed Analysis:

1. The main issue in this appeal was whether the delivery and collection charges, as well as loading and unloading charges incurred by the appellants, should be allowed as deductions from the sale price to determine the assessable value of industrial oxygen gas and acetylene gas sold in cylinders. The Assistant Collector of Central Excise initially ordered the inclusion of these charges in the price to determine the assessable value, despite Section 4(2) excluding the cost of transportation from the place of delivery in certain cases.

2. The Assistant Collector rejected the appellant's request for exclusion of these charges, citing that the contract mentioned these charges on an "average" basis, regardless of the distance of delivery. The Appellate Collector upheld this decision, leading to the appeal before the Tribunal.

3. The appellants argued that the delivery and collection charges were related to the transportation of filled and empty gas cylinders, which were borne by the customers, not the appellants. They further explained that loading and unloading charges were related to activities within the factory premises and during transportation to and from customer locations.

4. The appellants emphasized that the price list filed under Section 4 of the Central Excise and Salt Act, 1944, was based on actuals and not averages. They relied on various judgments, including those in Ashok Leyland Limited v. Union of India, Union of India v. Bombay Tyre International, and Mecneill & Magor Ltd. v. C.C.E., to support their argument that transportation charges should be excluded from the assessable value.

5. The ld. S.D.R. agreed that transportation charges should be deducted when the price at the factory gate is unknown. However, he argued that loading charges within the factory should be included in the assessable value, citing a Supreme Court judgment in Empire Industries Ltd. v. U.O.I. The Tribunal considered both arguments and the evidence on record.

6. After considering the arguments and evidence presented, the Tribunal found that the ex-factory prices were known and approved by the department. The Tribunal noted that the sale price at the factory gate was genuine and that the transportation charges should be excluded from the assessable value, as per the Supreme Court judgment in Union of India v. Bombay Tyre International Ltd.

7. The Tribunal ruled that delivery and collection charges unrelated to the manufacturing process should be excluded from the assessable value. However, loading charges within the factory premises were to be included in the assessable value, while charges for loading cylinders into railway wagons at the station should be excluded as transportation charges. Unloading charges outside the factory gate were also to be excluded from the assessable value.

8. In conclusion, the Tribunal partly allowed the appeal, allowing deductions for delivery and collection charges and unloading charges, but rejecting the same for loading charges within the factory premises.