UNION CARBIDE INDIA LTD. Vs. CCE, CHANDIGARH

JUDGEMENT

(1.) THE issue involved in the present appeal is about the deduction on account of transportation charges from the assessable value under section 4 of the Central Excise Act. Shri Shiv Dass, Ld. Advocate submitted that the appellants manufacture dry cell batteries. They had claimed the percentage of deduction at the rate of 1.7074% from the price list for the product from May 1988 to March 1989 on account of transportation charges on the basis of Chartered Accountant's certificate for the year ending 1937; that subsequently the appellants submitted a certificate of the Chartered Accountants for the year 1988 according to which the transportation charges were only Rs. 1.5528% (sic) and accordingly the Assistant Commissioner confirmed the demand amounting to Rs. 1,17,853.57 observing that the appellants had claimed transport charges higher by 0.1546%. The Commissioner (Appeals) confirmed the order in original observing that the actually incurred expenses were allowable which had been carefully done by the adjudicating authority. The Ld. Counsel submitted that it has been held by the Supreme Court in Baroda Electric Meiers Ltd. v. C.C.E., 1997 (94) ELT 13 (SC) :, 1998 (74) ECR 721 (SC) that wherever freight actually paid was less than the amount collected by way of freight and transportation charges, the differential amount was not includible in the assessable value as the duty of excise is a tax on the manufacture and not a tax on the profits made by a dealer on transportation. He, therefore, submitted that the duty cannot be demanded on the differential cost of transportation.

(2.) COUNTERING the arguments, Shri K. Srivastava, Ld. D.R. submitted that the decision in the case of Baroda Electric Meters, (supra) is not applicable to the facts of the present case as in that case the assessee had collected more transportation charges which is not so in the present matter; that the appellants herein had deducted the freight from the assessable value on the basis of the certificate given by the Chartered Accountants for the last year; that it had been admitted by the appellants in the reply to the show cause notice that the actual transportation charges are claimable for deduction for the relevant period and they were agreeable for the substitution of the original deduction claimed at 1.7074% by the actual figure of 1.5528%. We have considered the submissions made by both sides. We observe that the appellants had claimed the deduction on the basis of certificate of the Chartered Accountant for the last year and the actual expenditure on account of freight was found to be less for the relevant period. No evidence has been brought on record by the Appellants that actually they had collected the freight at higher rate from their customers. In absence of any such evidence, the decision in the case of Baroda Electric Meters, relied upon by the Appellants, is not applicable. The actual expenses on account of freight, as certified by the Chartered Accountant are to be deducted from the price for arriving at the assessable value. Accordingly we find no reason to interfere with the impugned order and accordingly reject the Appeal.