TMI Blog1993 (3) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petition is from 1st September 1976 to 29th February 1984. 3. The old Section 4 of the Central Excises and Salt Act was replaced by a new Section 4 which was brought into operation from 1st October 1975. Prior thereto, the Bombay Excise Collectorate issued a trade notice dated 18th August 1975 setting out therein, inter alia, the prescribed proforma for filing of price lists in view of the provisions of the new Section 4. The Company accordingly filed its price lists. According to the Company, through mistake of law, it claimed an exclusion from the price of only the cost of transportation of the goods. Thereafter, the Company by its letter dated 26th August 1976 addressed to the Assistant Collector, filed revised price lists where it claimed deduction from its price of post-manufacturing costs and expenses. According to the Company, its post-manufacturing expenses for the period 1-4-1974 to 31-3-1975 were Rs. 0.91 paise per dozen bottles of aerated waters. The price lists which have been filed by the Company for the periods which are relevant to the present petition are also filed on the same basis and the Company has claimed a deduction of Rs. 0.91 paise per dozen bottle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) Motor Trucks Insurance together with further or other claims or deductions or Heads of Expenditure beyond those dealt with in the judgment or orders of the Supreme Court in Union of India v. Bombay Tyres International case (supra). The petitioners were required to file requisite statements/amendment with the authorities by 9-1-1984. They were also required to file such documentary evidence as they may be called upon to do by notices issued by the assessing authorities within 2 weeks of the filing of the statements/amendments. Such documentary evidence was to be filed within 2 weeks of the notices. There were other detailed directions given in the said order which need not be reproduced here. Pursuant to the directions so given by the Ld. Judge, the 1st Petitioners filed statements before the assessing authority under their various heads of claim for deduction. 6. The assessing authority by its order dated 26-3-1984 denied to the petitioners deduction under three heads which are now being challenged before us in this petition by way of amendment. These three heads are : (1) Transport expenses (2) Cost of secondary, durable and returnable packing, and (3) Trade discou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the factory of the petitioners. Similarly any unused bottles are also collected and taken back to the factory of the petitioners. These are later distributed to other wholesale dealers. The petitioners contend that the cost of transport includes the costs of the delivery department as well as the cost of maintaining trucks and drivers. These should all have been allowed fully as a part of their transport costs. 8. In support they have relied upon a decision of the Supreme Court in the case of Indian Oxygen Ltd. v. Collector of C.E., 1988 (36) E.L.T. 723 (S.C.). In the case before the Supreme Court also, the assessee company which manufactured compressed Oxygen and dissolved acetylene which were sold in cylinders, had claimed the cost of transportation of these cylinders which included also the cost of return of empty cylinders to their factory. The price of sales of the product at the assessee's factory gate were also, however, available. Hence the Supreme Court said that since ex-factory price was available, value for the purposes of excise could be determined on that basis. Supreme Court, however, considered the question of cost of transportation and it observed, "it is cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sold. The cost of transportation will include cost of insurance and freight for transportation of the goods from the factory gate to the place or places of delivery. It was the contention of Mr. Desai that these observations of the Supreme Court do not cover the cost of return of empty bottles and hence petitioners are not justified in claiming these costs. But the subsequent Supreme Court decision in the case of Indian Oxygen Ltd. (supra), has expressly dealt with this aspect. Although the observations are obiter dicta, they are nevertheless binding on us. In view thereof, the assessee is entitled to claim a deduction in respect of the cost of the delivery department also. 10. The second head of deduction claimed by the assessee relates to durable and returnable packing. The assessee supplied their bottles of aerated water in crates. These crates are returned by the wholesalers to the assessee along with empty or full bottles. The assessee has claimed repair charges in respect of these crates as deductible expenses on durable and returnable packing. Section 4(d)(i) of the Central Excises and Salt Act, provides that "value" in relation to any excisable goods-, where the goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty deposit and the goods were not sold together with the bottles and crates. Therefore, wholesale price charged was not inclusive of charges on account of bottles and crates. These findings, in our view, do not appear to have any basis and proceed from non-application of mind to the material which was before the Assessing Officer. 13. Mr. Desai has also contended that there should be an agreement between the buyer and the company for the return of packing before claim can be made for deduction under this head. In support he relied upon the judgments of the Supreme Court in the case of K. Radha Krishaiah v. Inspector of Central Excise Gooty Others, 1987 (27) E.L.T. page 598 (S.C.), Mahalakshmi Glass Works (P) Ltd. v. Collector of Central Excise, 1988 (36) E.L.T. 727 (S.C.) and Sathe Biscuits and Chocolate Company Ltd. and Another v. Union of India and Others, 1984 (17) E.L.T. 39 (Bom.) It was, however, nobody's case before the Assistant Collector that there was no arrangement between the assessee-company and the wholesalers regarding return of crates. The arguments before the Assistant Collector proceeded on the basis that the crates were, in fact, returnable. In fact, the Assis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly specify any percentage of trade discount. But a special low price is fixed under the agreement which is lower than the price list published by the petitioners. In the case of supply to such customers, no discount is shown in the invoice. What is shown in the invoice is the agreed low price. The special price has been negotiated by the petitioner with individual wholesale dealers. There is no uniformity about the special price so agreed upon, nor is there any uniform basis on which petitioners have granted such a low price. The discount has varied from customer to customer. Such a discount falls within the ratio of the judgment of the Supreme Court in the case of Bombay Tyres International (supra) read with the decision of our High Court in Rallis India Ltd. Anr. v. Union of India (supra). As the arrangement is entered into prior of the removal of the goods, the discount is known to the customers before removal of the goods. Secondly, a special low price is clearly in the nature of a discount because it is lower than the published price list of the petitioners. The fact that it is differently negotiated with different customers also can make no difference. What is, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a trade practice which was known to each of the cash customers prior to removal of the goods or that each customer knew the quantum or percentage of discount at the time of removal of the goods. Normally such a trade practice is uniform and is well publicised and often mentioned in the price lists themselves. None of these factors are present in the present case. In these circumstances, it is difficult to accept that the criteria for granting such a discount to cash customers were known to the Trade in advance. The petitioners have themselves stated that the quantum of discount was a matter of individual negotiations. It is not clear when these negotiations have taken place in the absence of any written agreement. Undoubtedly, the petitioners have given such a discount to their cash customers. But the petitioners have merely set out in their letter dated 21-1-1984 addressed to the Assistant Collector, Exhibit Z-9 to the petition, that even if the discount to cash customers is not shown on the invoice, it is granted in accordance with the procedure adopted by the petitioners. They have said, "For the discount to cash customers, a book is given where every day purchases are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(iv)(d) of the Central Excises and Salt Act, 1944. The Assistant Collector, has, however, rejected the claim only on the ground that the crates were not separately charged for. This factor, in our view, is not of any relevance. The crates were supplied by the petitioners. They have therefore incurred the cost for such crates. What was required to be considered was whether cost of supplying such crates to the customers in which the bottles were admittedly packed, formed a part of the price. There is a complete non-application of mind to this aspect. The Assistant Collector has clearly misdirected herself in this regard. 20. A general contention is raised by Mr. Desai that the assessee had not produced evidence in the form of relevant documents in support of their claim for deductions and hence we should not intervene under Article 226 of the Constitution to set aside the order of the Assistant Collector. He has strongly relied upon the decision of this Court in the case of Britannia Industries Ltd. v. Union of India, reported in 1989 (44) E.L.T. 630 (Bom.). The entire grievance of Mr. Desai Ld. Advocate for the assessee is without basis because the Assistant Collector's order ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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