2001 (8) TMI 361 - AT - Central Excise

Summary

Issues: Rectification of mistake application regarding demand of duty on aerated waters valuation.

Analysis:
The rectification of mistake application pertained to Final Order No. 113/2001-A of the Tribunal concerning the demand of duty on the appellant regarding the valuation of aerated waters manufactured by them. The appellant's counsel contended that the final order did not address various points on valuation, specifically mentioning extra bottles given as discounts and additional amounts spent on procuring bottles. The counsel argued that without specific directions to the Commissioner to consider these claims during the remand proceedings, they might not be evaluated. The appellant requested acceptance of the rectification of mistake application to ensure the Commissioner examines these claims during the remand proceedings.

The Departmental Representative (DR) opposed the reopening of the case for additional grounds, stating that the Tribunal had only allowed reconsideration of certain claims for deduction in the remand proceedings and had not accepted other claims. The rectification of mistake (ROM) submitted, spanning 16 pages, essentially re-argued most issues raised in the appeal, which was noted as beyond the scope of an ROM. However, the ROM correctly highlighted two unaddressed issues: quantity discount and additional expenditure on procuring Pepsi bottles from kabadiwallah. These two points were acknowledged as needing acceptance in the ROM since they were not previously addressed in the Tribunal's Order.

Regarding the quantity discount, the appellant argued that supplying extra bottles of aerated waters without charging for the additional quantities constituted a quantity discount, distinct from sales promotion measures. The appellant contended that such practices were common in the soft drinks industry and were eligible for deduction. They emphasized that the adjudicating authority erred in not differentiating these supplies before disallowing deductions. Concerning the expenditure for retrieving Pepsi bottles in circulation, the appellant explained that due to bottles mixing up at various trade levels, they incurred costs to retrieve correct bottles from kabadiwallah. They asserted that this expenditure should be considered a deductible cost, similar to the deduction allowed for durable and returnable packing material.

In conclusion, the Tribunal allowed the ROM, directing the adjudicating authority to thoroughly examine the facts related to quantity discount and expenditure for retrieving bottles during the remand proceedings following Final Order No. 113/2001-A. The authority was instructed to assess whether the quantity discount and bottle retrieval expenditure claimed by the appellants were permissible deductions for valuing the aerated waters produced by them.