ORDER
Jeet Ram Kait, Member (T)
1. This appeal has been filed by the Commissioner of Central Excise, Chennai against order in Original No. 39/96 dated 15.10.1996 pursuant to a direction from the Central Board of Excise and Customs, New Delhi vide F. No. 199/107/97-Jud. Cell (BMB) Order No. 183-R/97 dated 21.8.1997, in terms of Section 35E(1) of the CE Act, 1944 for correct determination of the following points arising out of the order in original:
(a) whether after taking into consideration the facts stated in the case, the order passed by the Commissioner is a legally correct and proper order and
(b) whether by an order passed under Section 35C, the Tribunal should modify the order passed by the Commissioner and demand duty accordingly or pass such orders as may be deemed fit.
2. The brief facts of the case are that the respondents herein are manufacturers of Tractors and Farm Equipments and are having their Registered office at Madras and three manufacturing centres at Sembiam (Madras), Madurai and Bangalore. Their records revealed that the tractors were being removed for sale under four categories as under:
(a) To depots at various places in India
(b) To dealers at different parts of India
(c) To customers directly under Direct Customers Billing Scheme
(d) Export foreign countries
In respect of tractors cleared from the manufacturing centres to their Depots, the cost of transportation (freight) to the transporters was paid by the Respondents, hereinafter referred to as M/s. TAFE while in respect of tractors cleared to dealers and directly invoiced to customers, the freight charges were paid by the respective dealers/customers and such freight charges were not borne by M/s. TAFE. In respect of tractors cleared to sold to customers under the direct billing scheme a sum of Rs. 500/- per tractor was being collected by M/s. TAFE by way of reimbursement of freight charges from the transporters of such tractors. The transporters in turn were collecting the said sum of Rs. 500/- from the customers by inflating their freight bills and for paying back such amount of the company. There was no written agreement in regard to this transactions. Further it also appeared that in respect of sale of tractors effected from depots, a fixed amount per tractor was collected in the guise of “Tax suffered”. Up to 31.3.1994 all the tractors cleared for home consumption were cleared to Tractor Loading Yard of the Sales of Commercial Department (TLV for short) and the Gate passes did not carry the names of the actual consignee viz. dealer, customer or depot as the case may be. It was found that a in most of the despatches, the date of despatch was few days after the date of GPS. A perusal of the ground plan indicated that TLV was part of the factory premises. After 31.3.1994 the practice of issue of GPS for removal to TLY was stopped and TLV was shown as bonded room in the ground plan filed after 31.3.1994. M/s. TAFE appeared to have collected Rs. 55,09,500 as FRC during the period from 1.2.1990 to 9/1994. The amount of duty and cess recoverable on this appeared to be Rs. 8,16,463. In addition to above, M/s. TAFE also appeared to have realized a sum of Rs. 88,10,980/- on account of “Tax suffered” in respect of the tractors sold through their depots during the period 9/1993 to 9/94 and the duty not paid on this was worked out to Rs. 7,53,628/-
3. Statements were recorded from various functionaries of the M/s. TAFE including Depot Incharges and all of them stated that tractors from TAFE’s factories were received at respective depots on stock transfer basis and that invoicing raising of debit notes for collection of overhead expenses. Statements were also recorded from proprietors of Transport Companies who stated that an increased amount ranging from Rs. 1000 to 1300/- per tractor were paid by them whenever they took delivery from TAFE’s Kothari Depot. Show cause notice was accordingly issued to the appellant company and on consideration of the reply furnished by them the Commissioner has passed the impugned order dropping the proceedings. While passing the impugned order he has relied upon the judgment rendered by the Hon’ble Supreme Court in the case of Indian Oxygen reported in 1988 (38) ELT 723 (SC) : 1988 (18) ECR 161 : ECR C 1234 SC. He has held that the assessable value would also be applicable to tractors cleared to depots. He has further held that Rs. 500/- as well as the amounts against Tax suffered has been collected only on tractors cleared to depots and therefore, the collection of these amounts would not affect the assessable value applicable to the tractors cleared to depots. In the circumstances he has held that the charges against the assessee are not sustainable.
4. The Revenue has come in appeal against the above finding of the Commissioner on the direction of the Central Board of Excise and Customs. We find from the appeal memorandum, that no ground of appeal has been formulated by the Revenue. The Respondent-assessee has filed Cross Objection wherein they have contended as under:
(a) No proper appeal has been filed
(b) Only questions of law had been framed in the review order as well as in the appeal.
(c) There is no separate grounds of appeal memorandum
(d) There is apparent error in assuming that a reference application was being filed and hence only the question of law is being raised.
5. We have heard Shri G.S. Menon, learned SDR for the Revenue and Shri R. Raghavan, learned Counsel for the Respondent-assessee. The learned SDR confined his pleas only to the question raised in the Board’s order. The learned Counsel sought for dismissal of the appeal. He has also cited order passed by the Commissioner, Central Excise, Bangalore, in the case of the very same appellants vide order in Original No. 100/95 and also the order of this Bench by which the appeal filed by the Revenue was dismissed.
6. We have considered the submissions made by both the sides. As already noted above, the appellant-Commissioner has not drawn up grounds of appeal. We, therefore proceed to decide the appeal based on the material available on record. The issue relates to whether the amounts collected as freight reimbursement charges and tax suffered by TAFE are in the nature of additional consideration. We find that identical issue for the same period i.e. 2/90 to 9/94 in respect of the very same respondent-assessee in respect of their Bangalore (Doddaballpur Unit) came up for consideration before the Tribunal and the Bench presided over by Shri Justice UL Bhat, Ex-President of the Tribunal held that the amount collected as “Tax Suffered” from buyers at the depot outside the State of Tamilnadu and for the Karnataka Tractors is not includible in the assessable value as all those buyers do not form a class distinct from wholesale buyers at the factory gate. It was also held that “Freight reimbursement charges” (FRC) collected when the transport agency of individual customer comes to take delivery do not affect the approved factory gate sale and the appeal filed by the Revenue was dismissed. Since the facts in the present case are also identical, the above decision of the Tribunal squarely applies to the present appeal also. In this view of the matter, we see no reason to interfere with the order passed by the Commissioner and accordingly, the Revenue appeal is dismissed. The cross objection also stands disposed of accordingly.
(Pronounced in open Court on 4.6.2002)