ORDER
P.K. Kapoor, Member (T)
1. This is an appeal against the order dated 22.10.1982 passed by the Collector (Appeals) of Central Excise, Calcutta. The Revenue has also filed a cross objection. Briefly stated the facts of the case are that the appellants are engaged in the manufacture and sale of industrial explosives which were assessable under the erstwhile Central Excise Tariff Item No. 68. Since a substantial part of their sales were at the factory gate the appellants submitted a price list in Part-I declaring the ex-factory price at Rourkela. The price list was approved by the proper Central Excise officer. Besides selling the goods at the factory gate the appellants were also transferring the goods to their depots at various places throughout the country for sale to various public sector undertakings and other unconnected buyers. In respect of the goods sold from the depots, the post manufacturing expenses such as cost of freight, transportation, insurance etc. were added by the appellants to the ex-factory price to arrive at the selling price. In respect of the sales from upcountry depots during the period July, 1978 to June, 1980 the appellants preferred a claim for refund of the differential duty on the ground that on such sales as well duty was payable on the approved ex-factory price as against the duty actually paid on the basis of the depot sale price. The claim for refund of duty filed by the appellants was, however, rejected by the Assistant Collector by an order dated 23rd April, 1981. Being aggrieved by the order passed by the Assistant Collector of Central Excise, the appellants filed an appeal before the Collector (Appeals) of Central Excise, Calcutta who confirmed the order passed by the Assistant Collector.
2. On behalf of the appellants the learned advocate Ms. Amrita Mitra appeared before us. She stated that the Collector (Appeals) had erred in holding that even if there was an approved ex-factory price, in respect of goods sold to unconnected buyers from the depots the price realised at the depots would represent the assessable value. She contended that in terms of Section 4 of Central Excises & Salt Act, 1944 if the price at which the goods are sold at the factory gate in the course of wholesale trade is determinable such price has to be deemed as the assessable value of the goods even when they are sold from depots. She argued that under these circumstances the Collector (Appeals) had erred in holding that the expenses after delivery of the goods from the factory by way of transportation, insurance etc. were to be included in the assessable value. She reiterated her stand that even in respect of sales from depots ex-factory price represented the correct assessable value and the differential duty paid by the appellants was refundable. In support of her contention the learned advocate placed reliance on the decision of the Supreme Court in the case of Indian Oxygen Ltd. v. CCE, .
3. On behalf of the Revenue the learned SDR Shri Ram Parkash stated that in respect of sales made from the depots the appellants had failed to identify the post clearance charges on the goods in question during the relevant period. He placed reliance on the order passed by the Collector (Appeals) and pleaded for the rejection of the appeal.
4. We have considered the submissions made on behalf of both sides and examined the records of the case. It is seen that the appellants were clearing the explosives manufactured by them at the factory gate on payment of duty on the basis of the approved price list. It has been held by the Hon’ble Supreme Court in the case of Indian Oxygen Ltd. v. CCE that in terms of Section 4 of the Central Excises & Salt Act, 1944 where ex-factory price is ascertainable such ex-factory price has to be taken as the basis for determining the assessable value even in respect of sales effected from depots/service centre and the question of adding transportation charges or other post clearance charges in respect of sales effected from depots becomes irrelevant. The relevant extract from the said Judgment is reproduced below:
6. It is necessary to reiterate that value for assessable goods must be determined in terms of Section 4 of the Act. The said Section 4(1) provides that where the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section be deemed to be the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the asscssee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale. “Place of removal” under Section 4(4)(b) has been defined to mean a factory or any other place or premises of production or manufacture of the excisable goods or a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty, from which such goods are removed. The scope of determination of value has been explained and reiterated by this Court in Union of India and Ors. etc. etc. v. Bombay Tyre International Ltd. etc. etc. 1983 (14) ELT 1896 (S.C.) : 1984 1 S.C.R. 347. Following the principle of the said case the Tribunal noted in the judgment under appeal that the price ex-factory is ascertainable. If once that is the position as the Tribunal rightly pointed out, the issue of deduction of the rate from the prices ex-depots does not survive for the decision. But if the ex-factory prices were not ascertainable and the goods were to be assessable ex-depot, then it would be for the manufacturer to claim on the basis of actual evidence of the deductions should be admissible from the price list as per the provisions of the Act.
7. Counsel for the respondent, Ms. Indu Malhotra who argued this case with considerable ability before us drew our attention to the following observations in the Bombay Tyre International (supra) at pages 376 and 377 of the report:
Accordingly, we hold that pursuant to the old Section 4(a) the value of an excisable article for the purpose of the excise levy should be taken to be the price at which the excisable article is sold by the assessee to a buyer at arm’s length in the course of wholesale trade at the time and place of removal. Where, however, the excisable article is not sold by the assessee in wholesale trade but, for example, is consumed by the assessee in his own industry the case is one where under the old Section 4(a) the value must be determined as, the price at which the excisable article or an article of the like kind and quality is capable of being sold in wholesale trade at the time and place of removal.
Where the excisable article or an article of the like kind and quality is not sold in wholesale trade at the place of removal, that is, at the factory gate, but is sold in the wholesale trade at a place outside the factory gate, the value should be determined as the price at which the excisable article is sold in the wholesale trade at such place after deducting therefrom the cost of transportation of the excisable article from the factory gate to such place.
5. On the ratio of the Judgment cited above we set aside the impugned order and allow the appeal with consequential relief to the appellants. The cross objection filed by the Revenue is rejected.