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CASE NO.: Appeal (civil)  2873 of 2002

PETITIONER: Commissioner of Central Excise,Chandigarh                                                                                                                             

RESPONDENT: M/s Supreme Fabrics Ltd.

DATE OF JUDGMENT: 12/12/2007

BENCH: S. H. Kapadia & B. Sudershan Reddy

JUDGMENT: JUDGMENT

O R D E R

       None appears on behalf of the sole respondent.         The issue involved in this case is whether accruing  loading charges  collected by the assessee were liable to be treated as cum-duty price and if  so whether the Department was obliged to make the demand after allowing  abatement for central excise duty payable on such loading charges (see para  2(ii) of the civil appeal paper book).

       M/s Supreme Fabrics Ltd., Ludhiana claimed deduction from  assessable value on account of loading charges incurred while effecting  clearances from the factory gate.

       The AO held that deduction was not admissible in terms of Section  4(4)(d)(ii) of Central Excise Act, 1944. The AO took the view that the  amount of loading charges was includible in the assessable value. The AO  took the view that the assessee had omitted to include such loading charges  in the assessable value and, therefore, it was not entitled to  deduction/abatement on account of the said charges.

       Aggrieved by the decision, the assessee carried the matter in appeal to  the Commissioner (A). It was held that the said loading charges were  includible in the assessable value, however, following the judgment of the  Tribunal in the case of Srichakra Tyres Ltd.  v.  Collector of Central  Excise, Madras 1999(108)E.L.T.361(Tribunal), the assessee was entitled to  abatement. We quote hereinbelow the relevant paragraph from the order of  the Commissioner(A), which reads as under: \023Regarding calculation of assessable value I agree with  the appellants that value should be treated as cum-duty- price. This issue has been decided by CEGAT- LARGER BENCH. That under Section 4(4)(d)(ii) of  CEA 1944-Excise duty held payable subsequently is to  be abated from total sale price realization by treating it  as cum-duty held payable subsequently is to be abated  from total sale price realization by treating it as cum- duty price for determination of the assessable value and  quantum of duty demand payable. [Srichakra Tyres Ltd.  & Ors.  V/s.  CCE (1999(32)RLT-I(CEGAT)]. As in  this case demand of duty on \021loading charges\022 has arisen  subsequently and these amounts are total consideration  collected as loading charges should be taken as cum- duty-prices and demand has to be calculated after  allowing abatement of C.Ex.duty payable.\024

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The said order of the Commissioner came to be upheld by the Tribunal.  Hence, the Department has come to this Court by way of civil appeal.

       Shri R. Shukla, learned counsel appearing on behalf of the  Department, stated that the loading charges collected by the assessee was  part of cost of production and, therefore, the assessee was not entitled to the  benefit of abatement. It was further contended on behalf of the Department  that the Department had not accepted the judgment of the Tribunal in the  case of Srichakra Tyres Ltd. (supra) and that the Department had preferred  Civil Appeal Nos. 5862-5863/99 against the judgment of the Tribunal in  Srichakra Tyres Ltd. (supra). According to the learned counsel, the matter  is pending before this Court. According to the learned counsel the law laid  down by the Tribunal in the judgment of Srichakra Tyres Ltd. (supra) is  not correct.

       We find no merit in the above arguments. At the outset, it may be  stated that there is no averment in the grounds of appeal filed by the  Department before the Tribunal that the loading constituted cost of  production. Secondly, we find from the record that the Department\022s Civil  Appeal Nos. 5862-63 of 1999, which has been referred to in the synopsis at  page \021D\022, have been dismissed by three-Judge Bench of this Court vide  Order dated 26.2.2002, which we reproduce hereinbelow:      \023After hearing the learned counsel for the parties,  on the facts of this case, we are of the opinion that the  stand of the respondents is correct. Various calculations  have been made and we have taken into consideration  the subsequent price which has been approved by the  Department with effect from 8.10.1992 and it clearly  appears to us that the revision of the price was cum-duty  and, therefore, the element of duty in the increased  amount had to be deducted. The appeals are dismissed.

       No costs.\024                                                           (emphasis supplied)

             For the aforestated reasons, there is no merit in the civil appeal and  the same is accordingly dismissed with no order as to costs.