TMI Blog2005 (7) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. On account of cut throat competition from Pepsi, M/s. Britco had to provide incentive to the assessee. But for the incentive from the supplier of concentrates (raw material), the assessee was not in a position to face acute competition from Pepsi. On the other hand, the evidence on record indicates that price uniformity was maintained. No favour for extra commercial reasons were shown to any of the buyers of aerated water. There is no evidence of any concession to any of the buyers. There is no evidence of existence of any favoured buyers. In the circumstances, Rule 5 is not applicable. So far as ROC is concerned, the Commissioner found that the rent equivalent to interest was collected by the assessee on account of delay i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred to as "the assessee") were manufacturers of aerated waters. The manufacturing activity of the assessee basically consisted of bottling. The assessee obtained the concentrate (raw material) for aerated water from a subsidiary of Coca Cola Corporation. The name of that subsidiary was M/s. Britco Food Company Ltd. (hereinafter referred to as "M/s. Britco"). The assessee sold the bottled aerated water to the wholesale dealers. 4.The department found that the assessee used to collect from some wholesale dealers ROC @ Rs. 7.50 per crate. The department further found that the assessee used to receive price support incentives in the form of credit notes from M/s. Britco. Accordingly, the department issued show cause notice cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he buyers of aerated water; that they were received from M/s. Britco (supplier of concentrate); that the credit notes were received from M/s. Britco on account of reduction in the price of the concentrates and, therefore, the question of including the amount received under such credit notes in the assessable value did not arise. The Commissioner further held that no additional consideration had flown directly from the buyers of aerated water and, therefore, Rule 5 was not applicable to the facts of the present case. The Commissioner further found that the benefit of reduction in prices of concentrates was in fact passed on by the assessee to the buyers in the form of reduced sale price of the aerated waters; that, with effect from 12-9-1994 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department submitted that the assessee had reduced their wholesale price on instructions of M/s. Coca Cola Company in order to lower the incidence of excise duty; that this reduction in price of aerated water was compensated by issuance of credit notes by M/s. Britco (subsidiary of M/s. Coca Cola Company); that the giving of price support incentive by M/s. Britco to the assessee constituted additional consideration which in turn depressed the prices of aerated water and, therefore, the entire arrangement was entered into in order to lower the incidence of excise duty. It was further submitted that M/s. Britco the manufacturer of concentrates (raw material) had nothing to do with the marketing activity of the assessee. It was urged that M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l time, price is adopted as a measure or a yardstick for assessing the tax. The said measure or yardstick is not conclusive of the nature of the tax. Under Section 4, price and sale are related concepts. The "value" of the excisable article has to be computed with reference to the price charged by the manufacturer, the computation being made in accordance with Section 4. In every case, it will be for the revenue to determine on evidence - whether the transaction is one where extra-commercial considerations have entered and, if so, what should be the price to be taken into account as the value of the excisable article for the purpose of excise duty. These principles have been laid down in the judgment of this Court in the case of Union of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner found that the rent equivalent to interest was collected by the assessee on account of delay in returning of empty crates/bottles. The purpose of charging interest was to get back empty bottles/crates immediately as otherwise the assessee was required to make additional investment towards stock inventory on crates/empty bottles. Further, the said levy did not form the price of the aerated water and, therefore, ROC was not includible in the assessable value. In the circumstances, the Commissioner was right in applying the ratio of the judgment of this Court in the case of Collector of Central Excise v. Indian Oxygen (supra). 15.For the aforestated reasons, there is no merit in these appeals preferred by the department. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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