COMMISSIONER OF CENTRAL EXCISE Vs. GRASIM INDUSTRIES LTD.

JUDGEMENT

(1.) THE facts giving rise to this appeal by the Revenue are in brief as under: -

(2.) MS . Shweta Bector, the learned DR, assailed the impugned order by reiterating the grounds of appeal in the Revenue's appeal and cited the judgment of Tribunal in case of Kota Oxygen (P) Ltd. v. CCE, Jaipur, reported in : 2000 (121) E.L.T. 369 (Tribunal) wherein it was held that when acetylene gas was being sold by the Appellant at the same price irrespective of whether the gas was supplied in their own cylinders or in the cylinders brought by the customers, deduction from sale price of Acetylene, the cylinder maintenance charges and fixed rental charges were not permissible. She also cited the judgment of Apex Court in case of CCE, Indore v. Grasim Industries Ltd., reported in : 2009 (241) E.L.T. 321 (S.C.) wherein with regard to the provisions of Section 4 during period w.e.f. 1 -7 -2000, Apex Court referred to Larger Bench the question as to whether the concept of transaction value in the new Section 4 of the Central Excise Act, 1944, introduced w.e.f. 1 -7 -2000, makes any material departure from deemed normal price concept of erstwhile Section 4(1)(a) of the Act and also whether in Section 4 of the Central Excise Act, w.e.f. 1 -7 -2000, the definition of Transaction Value as given in Section 4(3)(d) of Central Excise Act, 1944 is subject to Section 3 of the Act. She, therefore, pleaded that the findings of Commissioner (Appeals) is the impugned order that testing Charges of Tonners are not the charges for the reason of or in connection with sale of the Chlorine, and not includible in the assessable value of the Chlorine, are not correct.

(3.) WE have considered the submissions from both the sides and perused the records. The respondent in their reply dated 16 -2 -2004 to the show cause notice have clarified that they supply Chlorine in their own tonners as well as in the tonners brought by their customers and in latter cases, sometimes on the customers' request, hydraulic testing of their tonners is done, if the same is due as per Gas Cylinder Rules, 1981, and only in such cases, the charges for such testing are charged from the customers. This plea of the respondent has been taken note of by the Original Adjudicating Authority in para 14 of his order and this fact is not disputed. In fact this para also mentions that some quantity of liquid chlorine is supplied through pipelines. The Assistant Commissioner, however, has held that irrespective of whether chlorine is sold by the Respondent in their own tonners or in the tonners brought by their customers, the testing charges of the tonners have to be treated as "for the reason of or in connection with sale" of Chlorine and same would be part of the transaction value of Chlorine, as periodical testing of the tonners is a mandatory requirement under Gas Cylinder Rules, 1981, and when periodical testing of the Cylinders/tonners is mandatory in connection with sale of Chlorine, the testing charges would have to be treated as charges for the reason of or in connection with sale of Chlorine. While the Commissioner (Appeals) has set aside this order of the Assistant Commissioner relying upon the Tribunal's Judgment in the case of Punjab Alkalis & Chemicals Ltd. (supra), the Revenue has filed appeal against the order of the Commissioner (Appeals) by mainly reiterating the reasoning of the Assistant Commissioner and emphasizing that testing of tonners, in which chlorine is supplied, is a mandatory requirement and therefore the charges for testing of the tonners, even if the testing is done on the request of the customers, have to be treated as the charges collected from the customers for the reason of or in connection with sale of Chlorine and would be includible in the assessable value of the Chlorine sold in such tonners. The point of dispute is as to whether the testing charges for the customer's tonners which according to the Respondent are optioned, are part of the transaction value of the goods.