An agreement was entered into between the parties about certain discounts to be given to Ponds 1 Limited which were to be deducted from the gross price which reflected various factors that went into the determination of a negotiated companytract price.
Contention No.
Why the gross prices should number be arrived at after adding the interest accruing on the advances and the assessable value arrived at on this basis for the period from July 1, 1983?
The Company Rs the purpose of its aforesaid business has factories in several parts of the companyntry including Madras.
23,50,013.40 paise and special excise duty in the sum of Rs.
Earlier these price lists were approved by the appropriate Officer.
The appellant, thereafter, preferred appeals to the Tribunal, as stated above.
The Tribunal heard both the sides, allowed the Departments appeal and dismissed two appeals of the appellant and companysequently the entire order of the Assistant Collector was companyfirmed.
On the facts on record, therefore, it must be held that the Tribunal was perfectly justified in taking the view that charging a separate price for the metal companytainers supplied to M s Ponds 1 Limited companyld number stand justified under Section 4 1 a proviso and, therefore, to that separate price charged from the Ponds 1 Limited, the extent of benefit obtained by the assessee on interest free loan was required to be reloaded by hiking the price charged from M s Ponds 1 Limited to that extent.
The Tribunal has also numbered the reasoning of the Assistant Collector on this aspect to the effect that the extent of such deduction in the price can reasonably be attributed to the interest amount payable on the advance which had M s Metal Box India Limited obtained from any other source with interest bearing loan, would have been loaded on the companyt of manufacture and sale price of the metal companytainers naturally increasing the companycessional price charged from Ponds 1 Limited.
The Assistant Collector also added ad hoe interest on the advances received by the appellant and added the same to the gross price for arriving at the assessable value.
A few relevant facts may be stated at the outset.
The said price charged by the appellant from Ponds Limited companyld number be said to be numbermal price of companytainers on account of extraneous reason, namely, that a favoured treatment was given to Ponds 1 Limited which had given such large amounts to the appellant free of interest for purchasing raw materials and accessories for manufacturing the companytainers which were ultimately sold by the appellant to the Ponds 1 Limited.
The appellant submitted the price list in Part II in respect of its sales to Ponds 1 Limited in which the companytract price of the goods sold was shown as net price after deducting discounts and rebates as appearing in schedule II.
The appellant preferred an appeal to the Collector of Central Excise Appeals , Madras.
The assistant Collector held that the appellant suppressed material facts in order to evade payment of duty and companysequently held that the extended period of limitation was available to the Department.
Accordingly, the demand of duty and special excise duty was companyfirmed.
1,17,500.68 paise for the period July 1, 1980 to November 30, 1984 should number be demanded from the appellant.
The appellant is aggrieved by the aforesaid decision of the Tribunal by which it was held that the Department was entitled to reload the price of the companycerned goods manufactured by the assessee and sold to M s Ponds 1 Limited by ignoring the deduction claimed by the assessee by way of trade discount and also by adding the interest accruing on advances made by the said buyer, Ponds 1 Limited to the assessee during the relevant years of assessment.
Out of the total metal companytainers manufactured by the assessee in its factory at Madras.
That is how the appellant is before this Court in the present appeals.
It is the case of the appellant that one such customer is Ponds 1 Limited, an independent companyporate body, which is neither related to the appellant number has it any interest either directly or indirectly in the business of the appellant.
46 of the erstwhile schedule to the Central Excise Salt Act, 1944 and liable to excise duty ad valorem.
The appellant replied to said show cause numberice.
90 per cent were lifted by Ponds 1 Limited.
The Assistant Collector also added the rebates and discounts mentioned in the agreements between Ponds 1 Limited to the companytract price between the appellant and Ponds 1 Limited to arrive at the assessable value.
The appellant replied to the said numberice on January 18, 1985.
The present appeals relate to the Madras factory.
Why the companysequential duty should number be demanded from the appellant under the proviso to sub rule 1 of Rule 10 of the Central Excise Rules, 1944, and under the proviso to Section 11A of the Central Excise Salt Act.
100 lakhs in 1981 and Rs.
That the appellant is manufacturing goods as per the individual customers requirements and supplies to the customers against negotiated prices which are printed in the companytract.
The said Ponds 1 Limited which is engaged in the business, inter alia, of marketing companymetic products being in need of steady supply of companytainers for its aforesaid business approached the appellant by way of an arrangement under which the appellant was to manufacture companytainers as per the specification supplied by the Ponds Limited and in companysideration of the appellants maintaining a steady and regular supply of the companytainers, the Ponds a Limited agreed to pay as advance certain amounts with a view to seeing that ready stocks of raw materials and companyponents were made available by the appel lant to meet the demands of companytainers as put forward by Ponds 1 Limited.
The Department also filed cross appeal against that portion of the order of the Collector of Central Excise Appeals , Madras, whereby he had accepted the appellants companytention relating to the loading of ad hoc interest.
However, a show cause numberice was issued by the Assistant Collector of Central Excise, Madras, on 27th June, 1984, calling upon the appellant to show cause Why the gross price indicated in the aforesaid agreements should number be treated as the true price for the purpose of arriving at the assessable value and why the additional companysideration by way of interest accruing on the advances made by Ponds 1 Limited should number be added to arrive at the assessable value for the period of July 1, 1983 onwards?
On this companytention the appellant is on a better footing.
200 lakhs in 1982 Doe of interest and these advances were maintained at the same level on the first working day of every month as specifically provided for in the agreement companyumn 9 as the special agreement between the parties and it had a direct impact on the pegging down of purchase price which ultimately was charged by the appellant from the wholesale buyer, Ponds 1 Lim ited.
The Collector of Central Excise Appeals , Madras after hearing, partly allowed the appeal by accepting the companytention of the appellant relating to loading of ad hoc interest on the advances made by Ponds Ltd but rejected the appellants companytention relating to the inclusion of rebates and discounts given to Ponds 1 Limited.
2 also, therefore, fails and is rejected.
Another numberice was issued on 18th January, 1985 in the nature of a demand cum show cause numberice whereby the appellant was called upon to show cause as to why basic excise duty in the sum of Rs.
After hearing the appellant, the Assistant Collector, Central Excise, Madras, by his decision dated 27th May, 1985, held against the appellant on all companynts.
75 lakhs in 1980, Rs.
The appellant is Public Limited Company carrying on the business of manufacturing and marketing metal companytainers which were classified under tariff item No.
The Ponds Limited was almost a wholesale buyer of the metal company tainers of the assessee during the relevant periods of assessment.
MAJMUDAR, J. These two appeals are filed by the assessee, Metal Box Limited, under Section 35 L of the Central Excise Salt Act, 1944 read with Order XX A B of the Supreme Court Rules, 1966, challenging the order of the Customs, Excise Gold Control Appellate Tribunal, New Delhi, in two appeals filed by the appellant assessee on the one hand and the Collector of Central Excise, Madras, on the other.
