9911796707
TMI Blog2003 (12) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing various grades and kinds of nylon cord fabric. The period involved in these proceedings is 12-9-1997 to 30-6-1998. During the period the appellants were extending 45 days credit to their buyers. As a result of the time lag which occasioned in realisation of the payments the appellants were incurring interest cost on receivable. Therefore, the appellants charged at the rate of Rs. 4.60 per Kg. from their buyers as interest expenses due to the extension of credit period to 45 days. This was separately charged in the invoices as PRE. The above amount would cover interest liability on average sale price of Rs. 178/- per Kg. for a period of 45 days. All the buyers were intimated about the charging of PRE as interest cost for credit peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants that the Commissioner has erred in rejecting the appellants' claim that PRE is interest on receivable. Learned Counsel points out that it is irrelevant as to under which head PRE is accounted. In order to appreciate its character, the appellants referred to letters written to various buyers in regard to PRE and different method adopted in billing during the relevant period. Orders issued by the buyers would also clearly show that they were aware of the character of PRE. 5. We find merit in the contention taken by the assessee. The communications addressed to the buyers as well as the purchase orders placed by them would clearly show that the buyers had understood the nature of payment made by them as PRE. Appellants are f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case the Commissioner does not take the stand that interest on receivable is not liable to be excluded from the assessable value. According to him, PRE collected by the appellants is not in the nature of interest on receivable. Learned Counsel for the assessee pointed out that in appellants' own case the Commissioner of Central Excise (Appeals), Chennai in his order dated 12-4-2000 has treated similar amounts received by the assessee as interest on receivable and dropped the proceedings. In view of the above discussion, we find no hesitation to hold that amount received as PRE by the appellants is in the nature of interest on receivable which is not liable to be added to the assessable value. We, therefore, set aside the order impugned an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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