ORDER
C.N.B Nair, Member (T)
1. The appellants are manufacturers of Formaldehyde which is liable to duty under Chapter 2912 of Central Excise Tariff Act. The present appeal is directed against a duty demand of over Rs. 9 Lakhs and an imposition of penalty over Rs. 1 Lakh in respect of Formaldehyde B grade removed by the appellants from their factory at Faridabad during the period December 89 to June 1991. The duty demand has been made treating the Delhi sale price of the goods as the assessable value. After disallowing the appellant’s contention that the sale price from Delhi Depot included freight and octroi, two elements meriting deduction while fixing the assessable value of the goods, the impugned order has taken the view that the appellant’s claim regarding depot at Delhi is not factually correct and that proof regarding actual freight and octroi have not been made available. This on the ground that transport and delivery were in appellant’s own tanker.
2. During the hearing of the case today, learned Counsel for the appellants pointed out that there is no dispute in the present case that the sale price was for delivery at the buyers premises. The learned Counsel pointed out that during the relevant period the appellants were making delivery in their own tankers and that they were charging Rs. 100 towards freight and Rs. 30 towards octroi. The learned Counsel of the appellants pointed out that under Section 4(1)(b) of Central Excise Act, deduction of freight was mandatory. So was the position with regard to taxes also. The learned Counsel submitted that the lower authorities were grossly in error in making duty demand after assessing the goods at a value inclusive of freight and octroi. The learned Counsel also pointed out that the present order is contrary to adjudication order No. 60/92 passed by the Assistant Collector of Central Excise in the appellant’s own case. The learned Counsel took us through that order and pointed out that the same points regarding the valuation of the appellant’s goods sold from Delhi was the subject matter of that order also and that the Assistant Collector had allowed the appellant a deduction of Rs. 125/- per M.T. towards freight and Rs. 30/- towards octroi.
3. The learned Counsel for the appellants also pointed out that full facts about the appellants method of sale and invoices were known to the Central Excise authorities and, therefore, demanding of short levy by invoking extended period under proviso to Section 11A of the Central Excise Act as done by the lower authorities was not justified at all. The learned Counsel submitted that since the facts about the appellants sale pattern was known to the Central Excise authorities, the finding regarding suppression of facts with intent to evade payment of duty lack credibility.
4. As against the aforesaid submissions on behalf of the appellants, learned SDR pointed out that the adjudication order No. 60/92 of the Assistant Collector did not cover the present case inasmuch as that order was for a later period in 1992. He also pointed out that the lower authorities could not be faulted for denying deduction towards freight since the delivery of the goods was in the appellants’ own tankers and details of cost of delivery had not been furnished. The learned SDR also maintained that the submission regarding time bar is not correct inasmuch as the appellants had wrongly reported that they had a Depot at Delhi where from the goods were sold.
5. We have perused the records and have considered the submissions made on behalf of both sides. The valuation on the basis of which the demand and imposition of penalty have been made is patently illegal. Section 4(1)(b) of Central Excise Act makes it clear that if normal sale price at the factory gate is not available and the price for delivery at another place is treated as the basis for arriving at the assessable value, due deduction towards freight should be allowed from the sale price for arriving at the assessable value of excisable goods. Same is the case in respect of octroi also. That the delivery of the goods was made in the appellants’ own tankers is no ground for not allowing the deduction towards freight, once it is admitted that the sales price is for delivery at a place other than the factory gate. The submission that particulars of expenditure towards freight was not available also lacks substance, particularly in the light of the fact that for a slightly later period the Assistant Collector had allowed deduction at the rate of Rs. 125/-for freight and Rs. 30/- for octroi. The amounts claimed by the appellant towards these elements also do not appeared to be incorrect in the light of the adjudication order No. 60/92 of the jurisdictional Assistant Collector for the later period.
6. In view of what has been stated above, we find no legal or factual
basis for the impugned order. The same is set aside and the appeal is allowed
with consequential relief to the appellants.