BAIF LABORATORIES Vs. CCE, PUNE

JUDGEMENT

(1.) THE appeal is directed against the order in appeal No. P -74/94, dated 10.3.1994 passed by Collector of Central Excise (Appeals) Pune, by which he partly allowed the appeal filed before him by the appellant challenging the order in original dated 21.1.1993 passed by Asstt. Collector of Central Excise, Pune -VI Division in terms of which the latter had disallowed certain deductions claimed in the price lists filed by the appellant for determination of assessable value of Pharmaceutical products manufactured by them. On behalf of appellant, Sh. B.K. Kulkarni, learned Chartered Accountant states that appellant was having factory gate sales as well as sales at their depots. They were paying duty on the basis of the depot price even for their sales at their factory gate. They had claimed deduction of certain expenses and charges from the depot prices for the determination of the assessable value. The Assistant Collector had disallowed ex -factory distribution expenses, salary and benefits of depot staff, expenses on advertisements and deduction on account of turn -over tax not actually paid by them to the concerned authorities. Aggrieved with the order of the Assistant Collector they had filed appeal before the Collector (Appeals). The Collector, while conceding the eligibility for deduction of freight and turnover tax actually paid by them had, however, held in the operative part of the order that they are entitled to deduction of only turnover tax paid by them but that the other deductions claimed by them were not admissible. Sh. Kulkarni points out that there is an obvious omission in the order of the Collector (Appeals) since he had not referred to deduction on account of freight in his order. He stated that as far as the other deductions are concerned which inter alia cover advertisement expenses and salary of depot staff he is not pressing the same in view of the settled position in law as held by the Supreme Court and other courts and Tribunal. He added that the penalty imposed on them was not warranted and he pleaded that the same may be set aside.

(2.) SHRI M. Ali, learned departmental representative states in reply that the Assistant Collector had actually not disallowed the freight element and the turnover tax to the extent paid by the appellant to the concerned authorities. The deduction on account of freight having already been allowed by the Assistant Collector, that did not survive for being agitated before the Collector (Appeals). If deduction on account of freight is allowed at this stage, it will amount to double benefits since appellant should have got relief in this regard consequent upon the Assistant Collector's order. The deduction actually allowed by the Collector (Appeals) relates to turnover tax actually paid by them but this again had already been allowed by the Assistant Collector.

(3.) THE order in appeal is modified by holding that the penultimate paragraph of the order holding the appellant to be eligible for deduction of turnover tax actually paid by them but disallowing the other deduction claimed by them should be modified to provide, in addition, relief by way of deduction on account of freight from the factory gate to the depots. The need for this will arise only if the same had not already been granted pursuant to the order of the Assistant Collector. Any consequential action on account of the direction contained in this order for allowing deduction of freight would be carried out by the Assistant Commissioner applying the provisions of Section 11B(2) of Central Excise Act on the question of unjust enrichment. In the circumstances of the case we are satisfied that the imposition of penalty on the appellant was not called for. We set aside the penalty. The appeal is allowed on the above terms.