HINDUSTAN LEVER LTD. Vs. CCE

JUDGEMENT

(1.) M/s. Hindustan Lever Ltd., Calicut. (herein after referred to as M/s. HLL or the appellants) have filed these appeals against the Order -in -Appeal No. 272/2000 -CE to 274/2000 -CE dated 11.12.2000 passed by the Commissioner of Central Excise and Customs (Appeals), Cochin. The appellant's claim of "interest on receivables attributable to sales on credit" and "Bank Charges" for deduction from the depot selling price in arriving at the assessable value was disallowed by the Original Authority in Orders -in -Original No 20/97 dated 24.4.97, 79/97 dated 20.2.98 and 68/99 dated 30.6.99. The appellants filed appeals before the Commissioner (Appeals) and the Commissioner (Appeals) in his Order -in -Appeal No. 272/2000 -CE to 274/2000 -CE dated 11.12.2000 has upheld the Orders of the Original Authority. The appellants are aggrieved over the decision of the Commissioner (Appeals).

(2.) Shri M.H. Patil, learned Advocate appeared on behalf of the appellants and Shri P.M. Saleem, Learned SDR appeared on behalf of the Department. Ld. SDR took us though the findings of the Commissioner (Appeals) in the Order -in -Appeal and contended that when there is no sale on credit basis, the question of interest on receivables does not arise at all.

(3.) The Commissioner (Appeals) observed that the appellants had categorically admitted in the 'Grounds of Appeals' in Appeal No. 242/99 that the terms of sale to wholesale buyers are cash on delivery and certainly no credit sale as observed by the Assistant Commissioner. Since no credit is involved, there cannot be any interest on receivable. This is the reasoning of the Commissioner (Appeals). The appellants pointed out that the Appellate authority has not got the facts right. The Commissioner (Appeals) had taken a decision based on the Appeal No. 242/99 which is not relevant to the issue for the following reasons - (i) During the period prior to 28.12.94, the unit of the appellants was known as M/s. Tata Oil Mills Co. Ltd. On merger with M/s. HLL with effect from 28.12.94, the appellants unit adopted the system of Hindustan Lever Ltd where sales to the normal trade were only on cash basis. But during the earlier period, sales were made against cash and credit. As far as the present appeals are concerned, M/s. HLL claimed abatement towards interest on receivables only in respect of credit sale made to Canteen Stores Department (CSD). In view of the above facts, the Commissioner (Appeals)'s decision is not based on the facts of the case and therefore, the same cannot be accepted. The appellants cited a plethora of decisions in support of their contention that interest on receivables is an allowable deduction even if the same is inbuilt in the price and not collected separately. As the law in this regard is well settled, we do not want to go into further details and set aside the order of the Commissioner (Appeals) disallowing the interest on receivables.