TMI Blog1995 (11) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No. 5432/92 2089 2271/93 C FA Re- muneration Disallowed by Collector (Appeals) on the ground that expenses go into the value of the goods. Disallowed as these expenses are part parcel of marketing and selling organisations Turnover Tax Disallowed - prohibition of recovery of TOT in Karnataka Sales Tax Act Allowed by AC Interest on Receivables Disallowed on the MRF decision recalled Disallowed on the ground that expenses upto date of delivery cannot be excluded (BTI) Interest on finished goods Disallowed on the MRF decision recalled - do - Bank charges Allowed by Collector (Appeals) - do - Special secon- dary packing Disallowed on the ground of packing being normal packing Disallowed as unit of sale is carton Quantity dis- count Disallowed as no evidence led Disallowed as discount not known prior to sale of goods Discount for damages Disallowed as extent of damage not known at the time of clearance Disallowed as discount not known prior to sale of goods Durable and retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to para 14 of the MRF judgment in which the Supreme Court had quoted relevant para of the clarificatory judgment of the Bombay Tyres International in which it has been clearly laid down that additional sales tax, surcharge on sales tax and turnover tax should be allowed to be deducted from the wholesale price in order to arrive at the assessable value. Similarly, learned Counsel submitted that in para 66 of the MRF judgment, the Supreme Court has held that interest on receivables will not fall within the ambit of any of the expenses held to be includible in the Bombay Tyres International case and is clearly excluded as it is only collected in view of the time taken in making the payment by up-country wholesale buyers. We find this contention acceptable. Bank Charges : Learned Counsel also submitted that in respect of bank charges the nature of these charges is akin to that of interest on receivables. The Tribunal had occasion to consider the includibility or otherwise of these charges and in its decision in the case of M/s. Guljag Chemicals and Plastics P. Ltd. reported in [1993 (63) E.L.T. 710]. The Tribunal has held that these are admittedly post manufacturing expenditure, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the decision, we find that in para 19 thereof, the Tribunal has followed the precedent decision in the case of Assam Valley (P) Ltd. v. CCE reported in 1989 (43) E.L.T. 360 (Tribunal) according to which varying discount reduction depending upon the nature and extent of damage in each case is admissible. In the Tribunal decision in the Assam Valley case, the Tribunal had held that the discount reduction actually allowed from case to case in such a situation may be accepted after necessary verification by the authority. While on the subject, learned DR Shri Singhal pointed out that arrangements in this regard regarding transit insurance is that the buyer bears the insurance and for any damage he claims from the Carrier, and the learned Counsel on the other hand says that as a matter of fact neither party is insuring the goods in transit. But the Counsel submits that the appellants, Hindustan Lever have a scheme by which on report of any damage by a customer, the discount they extend to him as a concession by way of proportionate discount. In such circumstances, the determination of the question of adding this element in the assessable value will have to depend on the ground situa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve carefully considered the rival submissions on this point. We find that in the case of Bombay Tyres International, the Supreme Court had observed that the expenses incurred on account of several factors which have contributed to the value of the goods upto the date of sale which apparently would be the date of delivery are liable to be included. Consequently where the sale is effected at the factory gate, expenses incurred by the assessee upto the date of delivery on account of storage charges, outward handling charges, interest on inventories, charges for other services after delivery to the buyers viz. after-sale service and marketing and selling organisation expenses including advertisement expenses cannot be deducted. The Supreme Court further observed therein that where the sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place outside the factory gate, the expenses incurred by the assessee upto the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted. But the Supreme Court pointed out that the assessee will be entitled to a deduction on account of the cost of transportation of the excisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the appellant, Hindustan Lever is eligible for the deduction of certain elements of cost on factual verification by the Jurisdictional Assistant Collector of Central Excise and the assessable value may be redetermined on such verification and in the light of the observations referred above as also on the ratio of the Supreme Court in the MRF case referred to supra. In so redetermining the value the Assistant Commissioner will give an opportunity of hearing to the appellant, Hindustan Lever and permit them to adduce evidence as they may have in the matter and may decide redetermination in accordance with law. 7. In the light of the above observations and our findings, the Department s appeals are also consequently disposed in the above terms. 8. On hearing the learned Counsel and the learned DR, we find that in the case of the appellant, M/s. Allied Processors the same elements of cost and the same submissions are made. Therefore, we dispose of this appeal also of M/s. Allied Processors in the terms as above for a redetermination of the assessable value in accordance with law and after giving the appellant an opportunity to put forth their case. - - TaxTMI - TMITax - Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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