ORDER
Shri G.A. Brahma Deva
1. This appeal is filed by the Revenue. The short point to be considered in this case is whether notional interest on advances is to be included or not in determining the assessable value. The respondent drew our attention to para – 5 of the order-in-appeal, which is as follows:
“I have carefully examined the facts of the case, the findings of the Assistant Commissioner in the subject Order-in-Original and the grounds put forth by the appellants in their appeal petition. I find the Assistant Commissioner has based his decision mainly relying upon the decision of the Hon’ble Apex Court in the Metal Box India Ltd, case. The Assistant Commissioner in his order has not brought out any evidence documentary or otherwise establishing his contention that actually there was nexus between the contract price/purchase order price and the advance deposit taken from a few customers who are normally new. He has also not disputed the fact that for such standard goods manufactured and sold by the appellants to all their customers, otherwise no advance deposit is taken. He has not brought out any evidence that either the price was lowered or there was substantial discount because of this advance. Therefore, the ratio of the decision of the Hon’ble Apex Court in the Metal Box India case cannot be applied to this case without doubt. When there is no evidence to the effect that actually the said advance deposit taken from a few customers had a reducing effect on the price or there was any substantial discount to the customers, the notional interest cannot be added to the assessable value. The burden is on the department to prove so, which had not been done so in this case. Accordingly, as per latest instructions of the Board in their circular no. 404/37/98 CX dated 22.6.98, issued on the basis of the Hon’ble Apex Courts decision in the case of VST Industries reported in 1998 (97) ELT 395 (SC) notional interest cannot be added in this case. It has been also held in the decision of the Hon’ble Tribunal in the case of Vidyut Metallics reported in 1998 (101) 86 (T) and in the case of Apco Industrial and Chemicals Ltd, reported in 1998 (77) ECR 467 that unless it is proved that the advance taken from a few customers actually had a lowering effect on the price, the notional interest cannot be added to the assessable value. Even in such cases which the goods manufactured and sold are tailor made goods and not standard goods, if it is not established and proved that advance taken resulted in lowering the value, such notional interest cannot be added to the assessable value as per the decision of the Hon’ble Tribunal in the case of Grasim Industries reported in 1998 (27) RLT 210 CEGAT, and Afco Industrial & Chemical case reported in 1998 (77) ECR 467 (T). This has also been held so in the decision of the Hon’ble Tribunal in the case of Armsel, Bangalore, in their order no. 609/98 dated 19.3.98. Therefore, the order of the Assistant Commissioner cannot be sustained since it has not been established and proved that such advance has actually lowered the price or depressed the price charged in this case which is decided by the contract for the tailor made goods.”
2. Smt.Radha Arun, appearing for the revenue tried to convince that there is a nexus between the interest on advance and price but utterly failed. We find that no evidence has been placed by the department to show that there is a nexus between interest on advance and fixation of price. In the facts and circumstances and on gong through the findings of the Commissioner (Appeals) we do not find any infirmity in the impugned order. Accordingly the appeal filed by the department is dismissed.
(Pronounced and dictated in the open court on 4.9.01)