TMI Blog1995 (7) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... The product is classified under Central Excise Item 68. The appellants were availing the concession as granted under Notification No. 120/75, dated 30-4-1975 and the party were assessing and paying duty on the invoice value. It was charged that the appellants had recovered Rs. 3,89,825.75, towards transportation charges from their customers for the period from October, 1979 to August, 1984, although they had incurred only Rs. 1,77,886.42 towards transportation charges for the above-said period. Thus they have recovered from their customers Rs. 2,11,939.33 in excess than the amount of transportation charges incurred by them. Further it appeared that the party have suppressed the facts by not submitting the copies of the said bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent has proceeded to add the difference in transportation charges which is not permissible and the same cannot be attributable to the manufacturing activities and profit if any, in the transportation charges cannot be added to the cost of the manufacture of the product for the purpose of Excise duty. He referred to the decision of the Supreme Court in the case of Collector of Central Excise v. Indian Oxygen Ltd. reported in 1988 (36) E.L.T. 730 (SC) wherein it was observed that it is well settled that the levy under the Act, is on the manufacture. In the instant case the respondents are manufacturers of gas which is subject to excise duty, but this gas is suppled in gas cylinder. The activity of supply of cylinders is not an activity of man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as can be read with Section 4, according to which carting/freight charges do not form part of the assessable value and as such looking to the circumstances the contention of the party has been accepted and ordered dropping the demand. He contended that since recovery charges were known to the Department and the practice has been continued there was no justification for invoking the larger period and accordingly the demand for the period December, 1979 to August, 1984 was barred by time since show cause notice was issued on 9-3-1985. He also argued for invoking larger period as well as to impose penalty there must be an intent to evade payment of duty and there was mens rea and same was not established. 4. Shri A.K. Singhal, learned JDR f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not even in the case of the party that there was factory gate sale apart from the goods supplied to the customers as per the contract and in the circumstancea freight charges recovered from their customers are directly attributable to the product and accordingly excess recovery from the customers is includible in the assessable value. The case law referred to by the appellants in the case of Indian Oxygen Ltd. is not applicable to the facts of this case since recovery of carting charges cannot be said to be a profit or gain of ancillary or allied venture and furthermore there was not separate factory gate sale in the instant case as it was rightly argued by the learned Departmental Representative. It is clear that transportation, loading a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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