SUPREME COURT OF INDIA
Commissioner of Central Excise, Ghaziabad
Vs
Apex Traders
Civil Appeal No. 192 of 2004
(B.P.Singh and S.H.Kapadia)
27/07/2005
S. H. KAPADIA, J.
1. This is an appeal under Section 35-L(b) of the Central Excise
Act, 1944 (for short "the said Act")
2. M/s. Apex Traders, Sahibabad (hereinafter referred to as "the
assessee") were engaged in the manufacture of aerated waters of brands,
namely, Thums Up, Limca and Gold Spot in the pack sizes of 500 ml. and 1000 ml.
falling under Chapter 22 of the Schedule to the Central
Excise Tariff Act, 1985. The assessee filed its price-list in part-I
effective from 1-3-1994 in respect of 1000 ml. and 500 ml. glass bottle packs
of durable and returnable nature. They also filed the price-list in part-1
effective from 1-3-1994 in respect of plastic bottled packs of 1000 ml. of
non-returnable nature of brands, namely, Thums Up, Limca and Gold Spot. The
assessee claimed deduction from the wholesale trade price on account of freight
and rent on containers (ROC). By Finance Act, 1994,
the Central Excise Rules were amended and the practice of filing of price-list
was abolished. There fore, the assessee filed a declaration of assessable value
under Rule 173C of the Central Excise Rules, 1944 in respect of a forestated
brands of aerated water effective from 1-4-1994. In this declaration the
assessee claimed, deduction from depot sale price on account of equalized
"freight and' On account of ROC on durable and returnable containers lie. glass
bottle packing of 1000 ml and M 500 ml. of the aforestated brands of aerated
water
3. The department found , that abatement. claimed on .account of freight' in
the price declaration was on the higher side as compared to what was claimed in
the price list submitted in March, 1994. Hence, the Assistant Commissioner
ordered provisional assessment of the aforestated price-declaration filed by
the .assessee. Ultimately, the-Assistant Commissioner finalized the provisional
assessment vide order dated 26-5-1998. The Assistant; commissioner found that
in the case of M/s. Coolade, Beverages Ltd, sahibabad, the commissioner of
cetral Excise, meerut vide his order dated 17-6-1997 had held that ROC did not
from part of the assessable valu and there fore relying on the order of the
commissioner dated 17-6-1997 the Assistant Commissioner in the present case
concluded that the ROC was an admissible abatement from the sale price account
of ROC effective from 1-4-1994 was allowed. At this stage we may clarify that
the order of the commissioner dated 17-6-1997 was the subject matter of civil
Appeal No 772 of 2001 preferred by the department which appeal has been
dismissed by this court vide judgment of even date.
4. On the second issue of equalized freight, the Assistant Commissioner came to
the conclusion that the assessee sold a part its good-to-independent dealers
ex-factory and the rest of the goods were sold by the assessee to its
depot/branches. The Assistant Commissioner: came to conclusion that the
assessee was clearing its goods at the same price at the factory gate as well
as from the depot and since the price at the factory gate and the price at the
depot was the same the assessment had to be done on the said price .in the
circumstances the assistant commissioner held that the Wholesale price charged
by the assessee at the factory gate should be treated as the assessable value
under section 4 of the said Act
5. Aggrieved by the aforestated decision on ROC and on equalized freight, the
department carried the matter in appeal to the Commissioner (Appeals),
Ghaziabad, who took the view that although ROC was admissible as held by this
Court in the case of Collector of Central Excise v. Indian Oxygen Ltd. reported
in (referred), the burden was on the assessee to provide records/data and
certificates to justify the extent of deduction claimed by the assessee for ROC
and for equalized freight. According to the appellate authority, the assessee
had failed to provide the requisite data justifying the extent of deduction on
the aforestated two items. In the circumstances, the appellate authority
allowed the department's appeal.
6. Aggrieved by the decision of the Commissioner, the assessee carried the
matter in the appeal to the Tribunal, which took the view that the issue of ROC
was already settled by the decision of the Commissioner dated 17-6-1997 in the
case of M/s. Coolade Beverages Ltd. As regards deduction on account of actual
freight, the Tribunal took the view that since the assessee had claimed Rs.
0.60 per crate as deduction whereas the actual expenditure per crate was Rs.
3/- per crate as certified by the Chartered Accountant of the assessee and
since the depot price and the factory gate price were the same, the appellate
authority had erred in interfering with the order of the adjudicating
authority. Consequently, the Tribunal restored the order of the Assistant
Commissioner and set-aside the order of the Commissioner.
7. At the outset, we may point out that in this case, we are concerned with the
quantum of abatement/deduction claimed by the assessee on account of equalized
freight and on account of ROC. We are not concerned with the admissibility of
the claim for deduction on account of ROC and equalized freight. When it comes
to the question of quantum, the duty is on the assessee claiming deduction to
provide requisite data and certificates from Chartered Accountant as well as
books of accounts to justify the quantum of deduction. In the present case, on
the item of deduction for ROC, the assessee has not produced the requisite data
indicating the basis on which ROC is computed. There is nothing to indicate
as to when ROC became chargeable. There is nothing to indicate the rate at
which ROC was chargeable. There is nothing to indicate whether the amount of
ROC was at all reflected in the invoices. #
8. Similarly, on the question of equalized freight, we find that the assessee
had sold a part of its goods to independent dealers ex-factory and the rest of
its goods were sold to its depot/branches. In this connection, it may be noted
that 25% of the total sales was to independent buyers. In other words, the
goods were partly sold at the factory gate and partly from the depot. The
assessee has not led evidence to justify the extent of the claim for deduction
on account of actual freight. The Assistant Commissioner has failed to
quantify, by actual facts and figures, the actual extent of the freight
allowable as deduction. #
9. In the circumstances, we remit the matter to the Assistant Commissioner to
decide the quantum of deduction/abatement from the sale price in wholesale
trade on account of freight and ROC, in accordance with law.
10. Accordingly, the appeal filed by the department stands allowed, with no
order as to costs.