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TMI Blog2004 (5) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... tion charges. 2.During the relevant period, the appellant manufactured and sold the goods principally to Government and Public Sector Undertakings. On account of the fact that the payments were not effected against delivery or within any specified period, the payments of the prices became delayed averaging between 3 to 12 months and, therefore, the appellant claimed deduction in respect of interest of such receivables calculated for the period between the date of removal till the date of realisation of payment. The deduction so claimed was supported by Certificate of Chartered Accountant for the relevant period. Deductions were also claimed in the price list filed from time to time. The assessing authority, the appellate authority and Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be deducted or not in the case of Asst. Collector of Central Excise & Ors. v. Madras Rubber Factory Ltd., 1987 (27) E.L.T. 553 (S.C.) = 1986 Supp. SCC 751. This decision again came up by way of review in the decision reported in Government of India & Ors. v. Madras Rubber Factory Ltd. & Ors., 1995 (77) E.L.T. 433 (S.C.) = 1995 (4) SCC 349. In the second judgment, this Court stated as follows :- "The case of the assessee (Madras Rubber Factory) is that where the goods are sold to upcountry wholesale buyers and payments are received quite sometime later, it is indeed a case of sale on credit and, therefore, the interest charged from the date of delivery of goods till the date of realisation of the price thereof should be deducted from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the ambit of any of the expenses held includible in Bombay Tyre International, it is clearly excludible and the claim for this deduction should, therefore, be allowed. 8.In cases where buyers do not make payments immediately against delivery of the goods but payments are received subsequently it would indeed be a case of sale of credit and, therefore, interest is chargeable from the date of delivery of goods till the realisation of price thereof and should be deducted from the value of the goods. The question whether in a given case the price structure itself includes the interest charged or not is a matter for establishment on evidence. The fact that a particular period for payment is mentioned would indicate that the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India v. Madras Rubber Factory Ltd. (supra). These three cases were adverted to by a Bench of three Judges to hold that the interest on receivables arises on account of time lapse between the delivery of goods and the realisation of monies is deductible from the assessable value of the goods at the time of removal from the factory of the assessee. For the same reason, bank charges included in the price on account of clearance of outstation cheques cannot form part of the price of the goods at the time of removal and as such excludable from the price while calculating the assessable value of the goods. 10.Therefore, we think, it is clear that the decision in Commissioner of Central Excise, New Delhi v. Vikram Detergent Ltd. case (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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