JAM PIPES Vs. COMMISSIONER OF C. EX., MANGALORE

JUDGEMENT

(1.) ARGUING for the assessee Shri Ravishankar, Advocate, submitted that the issue relates to Valuation. He submitted that transportation charges will not become part of the assessable value. He said that Central Excise duty is leviable on the manufacture and not on transportation of goods. He also stated that loading and unloading charges incurred outside the factory gate are not includible in the assessable value. He said that Supreme Court in the case of Indian Oxygen Ltd. v. CCE reported in 1988 (36) E.L.T. 723 (S.C.) held that the value under Section 4 is to be determined on the basis of the wholesale prices of the goods and does not include the transportation charges and as such not includible in the assessable value since the duty of excise is on manufacture and not on profits made on transportation charges. Shri Ravi Shankar submits that it was specifically charged in the SCN that the party had collected duty of Rs. 86,900/ - on transportation charges which includes forwarding charges (loading and unloading charges) at Rs. 1,000/ - p.p. as shown in Annexure to the SCN and retained the same using parallel sets of the invoices without informing the Department. He also submitted that the Department was not justified in imposing a penalty under Section 11AC of the Act as well as the interest under Section 11AB, which relates to the period 1 -1 -1994 to 26 -6 -1996 whereas amended provisions of Sections 11AB and 11AC which were introduced on 28 -9 -1996. It is further submitted that penal provisions under the relevant provisions cannot be imposed for the period in question since the amendment provisions were inserted subsequent to the period of dispute. He also referred to the decision of the Tribunal in the case of Marcandy Prasad Radhakrishna Prasad Pvt. Ltd. v. CCE reported in 1998 (102) E.L.T. 705 (T) which was confirmed by the Supreme Court and reported at 1999 Vol. (107) E.L.T. at page 121A in the Court -Room Highlights.

(2.) SHRI Thomas appearing for the revenue submitted that it is not a case where the assessee has collected towards transportation charges but he has collected duty on loading and unloading charges and same is to be included in the assessable value.

(3.) WE have carefully considered the matter. We find that there is substantial force in the argument of the assessee with reference to the penal provisions under Sections 11AB and 11AC of the Act. Penal action cannot be initiated under the respective sections for the period in question since the amendment provisions were introduced in 28 -9 -1996, subsequent to the period of dispute. In view of this position the penalty as well as interest levied on the assessee is hereby set aside.