MULTIMETALS LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) IN the impugned order ld. Commissioner (Appeals) upheld the order of the adjudicating authority. The Dy. Commissioner while adjudicating the case confirmed - demand of Rs. 64,251.44 and another demand of Rs. 11,196.38. Being aggrieved by this order, the appellants have filed the impugned appeals.

(2.) THE facts of the case in brief are that the appellants manufactured Copper and Copper Alloys, billets, rods. During the course of scrutiny of the records of the appellants it was noticed that they were manufacturing tailor -made goods and were receiving advances against the order of supply of such goods. These advances were being kept by the appellants for more man six to eight weeks from the date of receipt of the order. The Department therefore, alleged that the interest which /would have been earned on these advances should be included in the assessable value in terms of the provisions of Rule 5 of the Central Excise (Valuation) Rules, 1975. Accordingly, a SCN was issued to the appellants asking them to explain as to why interest at the rate of 15% should not be included in the assessable value. In reply to the SCN the appellants admitted the fact of their having received advances/security deposits from their customers on the ground that in the event the customers did not lift the tailor -made goods, the manufacturer is not put to any loss. It was contended by them that the amount taken as security deposits were adjusted against the price payable by the customer. It was submitted by them that the security deposits did not influence the price.

(3.) SHRI Y.K. Kumar, ld. Counsel appearing for the appellants submitted that the appellants were manufacturing goods both for Govt. Departments and private parties. He submitted that whereas security deposits were being demanded from the private parties, no such security deposits were asked for from the Govt. Departments. However, the price charged to the Private companies or the Govt. Deptts. remained uninfluenced. He submitted that there was no nexus between the sale price and the security deposits. He submitted that the Department has not received any evidence to prove that security deposits depressed the price of the goods. Ld. Counsel in support of his contention cited and relied upon the decision of this Tribunal in the case of Union of India v. Laxmi Machine Works Ltd. reported in 1995 (77) E.L.T. 799 (Mad.) in the case of Transformers and Electricals Kerala Ltd. v. C.C.E. reported in 1992 (62) E.L.T. 422 (Tri.) and in the case of Flex Industries Ltd. v. C.C.E. reported in 1997 (91) E.L.T. 120 (Tri.).