STERLITE INDUSTRIES INDIA LTD. Vs. CC

JUDGEMENT

(1.) THE issue being common in all the 5 appeals, they are taken up together for disposal as per law. The question that rises for consideration is as to whether the demurrage charges and despatch money is required to be added to the assessable value. The issue was gone into great detail by the Larger Bench in the case of Indian Oil Corporation v. CC, Calcutta as reported in which held that demurrage charge incurred by oil companies is not required to be included in the assessable value of the crude petroleum oil and other petroleum products. The Board of Central Excise in F. No. 467/21/98 -Cus. V dated 14.8.1991 also held that demurrage charges and despatch money may not form of a part of the assessable value. Later the Board issued another circular subsequently in -Cus, dated 2.3.2001 holding that demurrage charges and despatch money is required to be added to the assessable value.

(2.) WE have heard counsel Shri Muthu Venkataraman, Adv. Who pointed out that the Larger Bench judgment is binding on this Bench and the subsequent -Cus. Dated 2.3.2001 has got prospective effect and does not apply to the earlier period in which their case is covered. He relies on the Apex Court judgment rendered in the case of H.M. Bags Manufacturer v. CCE as reported in wherein the Apex Court has held that the demand based on Board's circular will have only prospective effect from the date of such circular is published or notified. He submits that the appeals are required to be allowed

(3.) ON a careful consideration we notice that the Board had issued a clear -Cus V dated 14.8.1991 holding that the demurrage charges and despatch money does not form part of the assessable value. The Tribunal also by its Larger Bench judgment in the case of India Oil Corporation v. CC, Culcutta as reported in had held that demurrage charges are not includable in the assessable value. Therefore the order of the Commissioner (Appeals) with regard to the period prior to 2.3.20001 holding that they are addable to the assessable value is not correct and proper. Respectfully following the ratio of the Tribunal which followed the Apex Court judgment, the impugned order is set aside and appeals are allowed.