FEDDERS LLOYD CORPN. LTD. Vs. CCE

JUDGEMENT

(1.) This appeal at the instance of the assessee is against Order -in Appeal No. 1154 -57 -CE/DLH/2001 dated 21.12.2001 passed by the Commissioner of Central Excise, Delhi -I. The issue arising in this case is one relating to determination of assessable value of goods when there is no wholesale price available.

(2.) The appellants are engaged in the manufacture of Air -conditioners and parts thereof falling under Chapter Heading 8415.00 of the Schedule to Central Excise Tariff Act 1985. Admittedly these goods are sold in retail from the sales Depot of the assessee. According to Section 4 of the Central Excise Act read with erstwhile Central Excise (Valuation) Rules 1975 value of such goods for the purpose of assessment should be derived from the normal price which is the wholesale cash price. Rule 6(a) provides that where goods are sold in retail, the value shall be based on the retail price of such goods reduced by such amount as is necessary and reasonable in the opinion of the proper officer to arrive at the price at which the assessee would have sold such goods in the course of wholesale trade to a person other than a related person. The Proviso to Rule states that in determining the amount of deduction due regard shall be had to the nature of excisable goods, trade practice in the commodity and other relevant factors.

(3.) Applying the above rules the wholesale price of the appellants goods was determined by deducting 15.21% from the retail price as per Order -in -Appeal No. 166/CE/78 dated 9.2.1978 by the Commissioner (Appeals). The assessee was paying duty on the above basis. While so, four show -cause notices dated 3.7.1997, 26.12.1997, 16.4.1998 and 30.9.1998 were issued to the assessee for the period December, 1996 to August 1998 alleging that in view of amendment to Section 4 of Central Excise Act 1944 no abatement of transport charges from the factory gate to the Sales Depot are permissible and therefore equalized freight indicated in the clearance document by the appellant towards transport of goods from the Factory to sales depot has to suffer excise duty. The appellant contented that the amendment to Section 4 cannot have any change in the mode of computation of the assessable value in the case of the appellant. Where there is no wholesale price available for the goods concerned, the assessable value has to be determined by applying Rule 6(a) of the Valuation Rules. The above contention was not accepted by the Adjudicating Authority as well as the Appellate Authority. Aggrieved by the above the appellant has come up in appeal.