CCE Vs. AKB PAPER MILLS PLANT SUPPLIERS

JUDGEMENT

(1.) ALL these eight appeals filed by the Revenue are directed against the Order -in -Appeal No. 411/96 dated 12.6.96 by which the Commissioner (Appeals) has allowed the appeal of the assessee and consequential relief on the ground that notional interest accrued on advances does not have any nexus with the assessable value. Since in all these appeals, a common question of law and facts are involved, they are taken up together for disposal according to law.

(2.) THE Revenue has come in appeal on the ground that the machinery and parts thereof manufactured by the assessee are tailor made goods against specific orders placed by their customers and in the absence of comparable prices not vitiated by extra considerations, the assessee's contention that the interest accruing on deposit has not vitiated the price is not proved. They have further taken the ground that money does not come free in the market. Therefore, when the fact of interest free deposit has proved the considerations accruing to the persons receiving the deposit ipso facto, at this stage itself the burden shifts to the assessee to prove that the extra consideration accruing from the buyer of the goods has not influenced the price. They have also relied upon the CEGAT Special Bench A New Delhi decision in the case of M/s. Resistance Alloys (India) Ltd., 1995 (77) ELT 721 (T) wherein it was held that deposit/advance enhances the working capital and, therefore, affects the assessable value and is in the nature of additional value flowing indirectly from the buyer to the assessee and therefore, this money value is to be determined by the quantum of interest. The Revenue has also relied upon the Judgment of the Hon'ble Apex Court in the case of Metal Box India Ltd., 1995 (75) ELT 449 wherein it was held by the Apex Court that interest on advances are to be included in the assessable value.

(3.) APPEARING for the Revenue Shri A. Jayachandran, learned DR while reiterating the grounds in the appeal memo further submitted that the assessee has not kept the advance received from their customers in separate account and has not credited the interest earned from such deposits to the buyers. He, therefore, submitted that interest accrued on the advance has to be included in the assessable value.