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TMI Blog2011 (4) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... ords, the Excise authorities noticed that the respondents had not effected sale of aerated water to the wholesale buyer at its factory gate. Instead, the respondents had been clearing their product in glass bottles after making payment of duty and removing them to the duty paid godown situated adjacent to their factory. The duty paid stocks so removed were then sent to the customers in lorries owned by the respondents or engaged on hire on long term basis. For that purpose, the goods were delivered to the customers/dealers at higher price and cash memos were issued while unsold stock and empty bottles were brought back to the company's godown. 3. The respondents used to file declarations from time to time disclosing the wholesale price/assessable value while claiming deductions towards excise duty, sales tax, transportation charges, containers charge, service charge and other service charges including trade discount etc. before arriving at the assessable value under Section 4 of the Central Excise Act. The Department, however, disagreeing with the claim regarding deductions issued a first show cause notice dated 28-7-95 for the period from March 1994 to March 1995. Having con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deductions as claimed were allowed. 5. The six heads in relation to which deductions were allowed were as under :- (i) Mazdoor and Cartage expenses on account of bringing of breakdown vehicles. (ii) Service charges including handing and establishment cost of sale of shipping department (iii) Shell repair cost (iv) Interest on the containers (v) Trade discount given to the beverages to the customers (vi) Other trade discount between one or more bottle free of cost to the customers. 6. Aggrieved by the said order, disallowing the deductions on two heads, the respondents filed appeal before this Tribunal. However, the same was dismissed by the Tribunal vide its order dated 24-1-2002 [2002 (146) E.L.T. 496 (Tri. - Del.)] confirming disallowance of deductions on the said two Heads. Being aggrieved, the respondents preferred appeal to the Apex Court which came to be dismissed on 23-9-2002 [2003 (152) E.L.T. A265 (S.C.)] finally settling the controversy in favour of the Revenue as regards the refusal of the deductions under the said two heads. 7. By order in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derstood to mean that the Tribunal had expressed any opinion regarding the admissibility of deductions under the remaining six heads which were not the subject matter of scrutiny before the Tribunal. That being so, the proceedings instituted by the Commissioner, Central Excise pursuant to the order passed by the Central Board of Excise and Customs brought up a subject matter which was distinctively different from that which had been examined and determined in the assessee's appeal no matter against the same order, especially when the decision was not rendered on a principle of law that could foreclose the Revenue's case. The Tribunal obviously failed to notice this distinction and proceeded to apply the doctrine of merger rather mechanically. It failed to take into consideration a situation where an order may be partly in favour and partly against a party in which event the part that goes in favour of the party can be separately assailed by them in appeal filed before the appellate Court or authority but dismissal on merits or otherwise of any such appeal against a part only of the order will not foreclose the right of the party who is aggrieved of the other part of this order. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period in respect of similar claim relating to deduction on the same heads. Reliance is also placed in the decision in the matter of Supreme Petrochem Ltd. reported in 2009 (240) E.L.T. 38 (Tri. - LB). 9. Referring to each of the items based on which the deductions were made, it is the case of the Department that the Mazdoor Cartage expenses incurred in bringing the vehicles which are broken down amount to handling expenses incurred in relation to the goods till the date of delivery and therefore the deduction of Rs. 6975/- is not admissible. The service charge including handling relates to the expenses incurred in unsold stocks, stored overnight in the duty paid godown and dispatched the next day for sale and hence Rs. 24 lakhs in that regard is not deductible. The establishment cost in respect of sales, shipping and transport Department such as salary, HRA, PF, ESI, gratuity, LTC, that of staff, leave encashment, medical, motor car expenses amounting to Rs. 62,12,518/- out of the total claim in that regard to the tune of Rs. 1,37,96,648/- ought not to have been held as admissible. Shell repair cost of Rs. 2,27,229/- is inadmissible as it related to wooden crates which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is totally devoid of substance. While dealing with the appeal at the earlier round of proceedings, the respondents had raised objection about non-maintainability of the appeal on the ground of merger of the impugned order in the order passed by the Tribunal in the appeal filed by the assessee. Though the contention was upheld by the Tribunal, the Hon'ble Supreme Court set aside the same and remanded the matter to decide the matter in accordance with the provisions of law. The order passed by the Apex Court nowhere refers to the issue which is now sought to be raised by the respondents. In fact, the respondents had failed to raise the said issue either before the Tribunal or before the Apex Court. Though the principle of res judicata as incorporated in Section 11, Explanation (iv) of the Code of Civil Procedure is not applicable to the proceedings before the Tribunal, the principle thereunder would always apply in such matters. The respondents had ample opportunity to raise the said issue in the earlier round of proceedings. Not only before the Tribunal but also before the Apex Court. Having failed to avail the said opportunity, it is too late in the day to raise the said iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the earlier appeal proceedings which were initiated at the instance of the assessee. The subject matter of controversy in the present appeal is related to the claim of deductions on the said six heads which is different from the one considered in the earlier appeal proceedings. 15. The main challenge to the impugned order in relation to the grant of deduction of deductions on the above listed six heads is that the authority below had disallowed the said deductions for the period from March 1994 to March 1995 under the order dated 23-6-2000 which was confirmed in appeal by the Tribunal by its order dated 2-3-2001 red with 20-8-2001 and 8-4-2005 hence it was not open to the adjudicating authority to decide contrary to the earlier order confirmed by the Tribunal merely because the claim related to the subsequent period and that too without any new material being placed on record to justify the decision different from the one taken for earlier period. Even though we have heard at length the Advocate for the respondents, he has not answered or countered this contention canvassed on behalf of the Department. Obviously, the respondents have no answer to the said contention sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds is not sustainable. 19. As righty pointed out by the Jt. CDR, in Madras Rubber Factory Ltd. case, the Apex Court had held that it is for the assessee to decide where to sell his goods. He can choose to sell his goods at the gate that is at the place of removal. He may choose to sell through his selling organisation where the goods are sold in the course of wholesale trade through depots outside the place of removal, the assessee would .independently incur expenses not only for the transport of the goods from the place of removal to the depots but also on maintaining and running of depots but these expenses according to the Union of India v. Bombay Tyres International reported in 1983 (14) E.L.T. 1896 are on the same par as after sale with reference to the service charge and advertisement charges and hence cannot be deducted. 20. For the reasons stated above, therefore, the appeal succeeds and the same is allowed and the impugned order is set aside and the matter is remanded to the adjudicating authority for passing appropriate order after hearing the parties and bearing in mind the observation herein above. The matter should be disposed of within a period of six mont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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