ORDER
K.C. Mamgain, Member (T)
1. The issue involved in this appeal is whether rental charges of machines used for loading in the factory are to be added to the assessable value of the goods or not.
2. Shri T. Rajeswara Sastry, Ld. Advocate appearing for the appellants pleaded that the case of the Department is that the hiring charges for loading machines given to the transporters at the factory premises for loading of the goods in trucks are, in fact, loading charges. He claimed that since these are hire charges, these are not includable in the assessable value of the goods. He referred to Page 58 of the paper book wherein a letter dated 25.1.2001 was written by the appellants to the Asst. Commissioner of the Central Excise, Davangere, intimating that the amounts collected by the appellants from the transporters are towards the charges for use of their machinery in the loading area. These machines are used by the transporters for loading of the goods in the lorries instead of engaging manual labour. Loading of the goods in the lorries instead of engaging manual labour. Loading of material is the responsibility of the transporter as their freight charges includes loading of material. The assessable value of the excisable goods sold by them are determined including all expenses incurred till delivery of the goods at the factory gate. The amounts collected from the transporters are not collected as loading charges. They relied on the following decisions-
(i) CCE v. Indian Oxygen Ltd.
(ii) Grasim Industries v. CCE 2004 (164) ELT 257 (T) :
2004 (113) ECR 645 (T)
(ii) CCE, Indore v. Indore Bottling Co. 2003 (54) RLT 131 (SC)
(iv) CCE v. Vishall Beverages (P) Ltd.
(v) Madurai Soft Drinks v. CCE 2003 (45) RLT 319 (T)
In these cases, it was held that rental charges collected for cylinders for supply of gases are not to be part of the assessable value. The learned Advocate also relied on the Board Circular No 7/98 CX. 1 dated 7.7.1989 wherein it was clarified that the charges like the retention charges/rental and charges incurred for maintenance and service of durable and returnable containers may not be included in the assessable value. He also relied on the decision of the Tribunal in case of Aglowmed Pvt. Ltd. v. CCE wherein it was held that the cost incurred for loading and unloading of goods for transportation from the factory to the point of delivery not includible in assessable value, being transport charges. He also referred to Para 10 of the decision of the Apex Court in the case of Union of India v. Hindalco Industries and pleaded that the allegations contained in show cause notice proceed on the basis as jf the valuation of the goods ought to be under clause (b) of Section 4(1) of Central Excise Act, 1944 ignoring the provision of Clause (a) of Sub-section (1) of Section 4. There being no valid foundation for ignoring the price under Clause (a) of Sub-section (1) of Section 4, the authority lacks jurisdiction to issue notice calling upon the assessee to show cause in the matter.
3. Shri L. Narasimha Murthy, learned SDR appearing for the Revenue pleaded that the very letter placed at Page 58 of the paper book on which the appellants have relied in their defence clearly states that the amount collected by them from the transporters are towards the charges for use of their machinery in the loading area. These machines are used by the transporter for loading of goods in the lorries instead of engaging manual labour. Therefore these charges are loading charges of the goods in the lorries. The loading charges of the goods in the lorries inside the factory are not excludable from the assessable value. He relied on the decision of the Tribunal in the case of R.N. Misra v. CCE, Bhubaneswar wherein it was held that loading and stacking charges in the Truck at factory gate liable to be included in the value of excisable goods under Section 4 of the Central Excise Act, 1944. He also relied on the decision in the case of Collector of C. Excise, Nagpur v. Solar Chemicals 2000 (124) ELT 896 (Tri.) wherein the Tribunal has held that loading charges incurred within the factory includible in the assessable value under Section 4 of the Act.
4. We have carefully considered the submissions made by both the sides. We find that the hiring charges for the machines used for loading the goods within the factory in truck are nothing but part of loading charges and these are being collected in the name of rent of the loading machines. All the charges/expenses incurred for the goods for handling the goods within the factory premises are required to be added in the assessable value of the goods, as has been held by the Tribunal in its various judgments relied upon by the Revenue and the Supreme Court in case of Bombay Tyre International 1983 (14) ELT 1896 (SC) : 1983 ECR 1627 D (SC) : ECR C 663 SC. The appellants have relied on the decision of the Tribunal in case of Aglowmed Pvt. Ltd. v. CCE . We found that this decision is for loading the goods from factor and subsequent transport. In the present case the goods are loaded inside the factory. All handling charges incurred inside the factory enrich the value of goods and these are required to be added in the assessable value of goods in view of the decision of the Supreme Court in case of Bombay Tyre International (supra). The decision of the Tribunal in case of Aglowmed Pvt. Ltd. v. CCE (supra) is based on the Supreme Court decision in case of Union of India v. MRF where in also it was held that the transportation charge from factory gate to point of delivery are to be excluded. The other decisions relied upon by the appellants on rental charges of cylinders are not relevant to the present case. The rental charges for loading machines are collected from the customers and paid to the appellants. Therefore, the rental charges for the loading machines collected by the appellants are nothing but a part of the loading charges inside the factory. These are therefore includible in the assessable value of the goods. This view is supported by the Tribunal’s judgment relied upon by the Revenue in cases of CCE, Nagpur v. Solar Chemicals (supra) and R.N. Misra v. CCE, Bhubaneswar (supra). We therefore see no merit in the appeal and the same is rejected.
(Pronounced in the Court on 16.7.2004)