ADHUNIK DETERGENTS LTD Vs. COLLECTOR OF C. EX.

JUDGEMENT

(1.) THE appellants are manufacturers of washing powder, which is liable to duty under Chapter 3402.90 for Central Excise Act. The impugned order has confirmed duty demand of over Rs. 7 lakhs and imposed a penalty of Rs. 50 thousand on the appellants. The duty demand is on the ground that the deductions claimed by the appellants from the sale price (for the purpose of arriving at the assessable value of the goods under Section 4 of the Central Excise Act) were not correctly made. Demand of over Rs. 5 lakhs related to the deduction towards handling and transportation charges, over Rs. 46 thousand related to interest on security deposits made by the dealers who purchased the goods from the appellants and over Rs.1.9 lakhs related to deduction claimed towards Sales Tax.

(2.) THE demand has been made (under Proviso to Section 11A(1) of the Central Excise Act) for the extended period on the ground of suppression of facts, while filing price list.

(3.) THE appellants have submitted that the handling and transportation charges related to cost of transporting of the goods from the factory, and distributing it to various dealers. M/s. Sharma Handling Agency, Bombay was performing the transportation and distribution work under an agreement and the appellant was making payment to them at the rate of Rs. 1.50 per Kg. up to June, 1988 and there after at 90 paise per Kg. The Appellants submitted that they had passed on the entire amount collected under this head to M/s. Sharma Handling Agency except for a small amount of over Rs. 4 thousand. They have submitted that the demand has been confirmed by the Commissioner contrary to this fact. They have also submitted that as the collection and expenditure related entirely to post manufacturing activities there was no justification in law to include the handling and transporting charges in the assessable value of excisable goods. During personal hearing it was submitted on behalf of the appellants that the invoices covering the sales clearly indicated that the sale price was on ex -factory basis. Therefore, there was no justification for making any additions while assessing the goods into Central Excise Duty. However, relevant invoices have not been filed along with the appeal or made available for scrutiny at the time of hearing. Further, we find from the price list that the appellants had made claims for deduction from the sale price under various headings.