JUDGMENT
Jeet Ram Kait
1. The MISC application has been filed by the revenue seeking change of cause title revenue appeal be read as Commissioner of Central Excise, Chennai III Commissionerate in view of trifurcation of Chennai combined Commissionerate. The MISC application is allowed.
2. This appeal has been filed by the Commissioner of Central Excise, Coimbatore whereas the jurisdiction of the Commissionerate has been transferred now to Commissioner of Central Excise, Chennai-III. This appeal has been filed on the ground that M/s. Indi Carb Limited, Hosur who are the manufacturers of Tool tips & Tool inserts falling under chapter 82 and 84 of CET have received some amount as advance from the dealers for execution of orders placed by them for the supply of excisable goods. Revenue has further stated that they had not included in the assessable value the amount of notional interest accrued/accruable on the advance amount. They also submitted that since the notional interest accrued/accruable on the advance received form the dealers amounted to additional consideration and as such includible in the assessable value should have been upheld by the Commissioner (Appeals), Trichy who has rejected their appeal by upholding the order passed by the lower authority.
3. Heard Ld. DR Shri Mani who has reiterated the submissions made in the grounds of appeal and has requested that the departmental appeal may by allowed since in the case of METAL BOX INDUSTRIES LTD., 1995 (75) ELT 449 (SC), the Hon’ble Supreme Court has laid down the law that for the purpose of Section 491) the normal price would be the price which must be sole consideration for the sale of goods and there could not be other consideration except the price for the sale of goods and only under such a situation, Sub-section (1) (a) would come into play. He further submitted that the amount collected as advance by the assessee was deposited in their Current Account which bears interest and subsequently the amounts are withdrawn from such account for their day-to-day operations and there is no evidence which was produced by the assessee to show that said amount was kept idle. whereas both the lower authorities have wrongly endorsed the view that the advance amount was received only as a security deposit. He has relied on the judgment of M/s. RESISTANCE ALLOYS (I) LTD., 1995 (77) ELT 721 (T) in which the Tribunal held that deposit/advance enhances the working capital and affects the assessable value and is in the nature of additional value flowing indirectly from the buyer to the assessee and therefore this money value is to be determined by the quantum of interest..
4. None appeared for respondent in spite of various notices sent to them.
5. Therefore, we are proceeding to decide the case on merits. In this case the issue is no longer res integra. This issue has already been decided by the Hon’ble Apex Court in the case of VST INDUSTRIES LTD., V. CCE Hyderabad reported in 1998 (97) ELT 395 (SC) wherein it has been held that notional interest on advances/security deposits taken from customers is not to be added. The assessees are charging uniform prices from wholesale buyers irrespective of the fact whether the buyer the goods at credit or against cash. Interest-free deposit scheme has been introduced by the assessee because of commercial consideration of covering the risk of credit sales. There is no evidence that any special amount or reduced price has been given by the assessee to the buyers who are keeping the deposits. Hence. duty has been charged only on the uniform prices paid by the buyers without addition of notional interest. This Bench as well as the co-ordinate benches have also decided the issue, after following the ratio laid down by the Apex Court in the case of VST INDUSTRIES LTD (supra). We, therefore, find that the order of the lower authorities is legal and proper and does not require any interference form the Bench. We, therefore, reject the appeal filed by the department after confirming the impugned order. Ordered accordingly.
(Dictated and pronounced in open Court)