D.J. MALPANI Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Appellant is a manufacturer of goods falling under Chapter 24 of the Schedule of Central Excise Tariff Act. Appellant recovered some amount as Dharmada(Charity) in the invoices from the customers while selling them goods, which according to it was not to be compulsorily paid by customers and the amount so collected was exclusively for charitable purposes.

(2.) The Superintendents issued show cause notices to the appellant on the ground that the Dharmada collected by the appellant could not be claimed as a deduction from the assessable value under Section 4 of the Central Excise Act, 1944 (hereinafter referred to as "the Act") and raised the demand of duty, penalty, interest etc. Signature Not Verified Digitally signed by Suman Wadhwa Date: 2015.09.09 for the periods April,1997 to April,1998 and April,1997 to March, 14:42:58 IST Reason: 1998. This resulted in passing of the order dated 08.01.1999 by the Adjudicating Authority holding that Dharmada collected by the appellant was used only for charitable purposes and hence the said charges were not trading receipts and, therefore, could not be included in the assessable value. Consequently, he dropped the entire demand raised by the said show cause notices. However, in the meantime, the Superintendents had again issued show cause notices dated 16.7.1998, 04.12.1998, 18.11.1998 and 15.02.1999 to the appellant with the same demand. In respect of these notices as well, on 23/24.08.1999, the Deputy Commissioner of Central Excise, Ahmednagar Division held that Dharmada charges were not trading receipts and, therefore, could not be included in assessable value and as a result dropped the entire demand raised by show cause notices.

(3.) After a lapse of one year, another show cause notice dated 03.08.2000 was issued by the Deputy Commissioner of Central Excise and Customs relying upon Section 4 of the Act whereby he called upon the appellant to show cause as to why central excise duty be not recovered from it under Section 11A of the Act read with Rule 9(2) of the Central Excise Rules,1944 and further called upon the appellant to show cause as to why penalty under Section 173Q and interest under Section 11AA of the Act be not levied upon it. Upon hearing the appellant and after having gone through its written reply, the Deputy Commissioner of Central Excise and Customs vide his order dated 26.02.2002, held that Dharmada cannot be considered as trading receipt and, therefore, cannot be held as a part of assessable value.