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CASE NO.: Appeal (civil)  192 of 2004

PETITIONER: Commissioner of Central Excise,Ghaziabad.                                        

RESPONDENT: M/s Apex Traders, Sahibabad              

DATE OF JUDGMENT: 27/07/2005

BENCH: B.P. SINGH & S.H. KAPADIA

JUDGMENT: J U D G M E N T

KAPADIA, J.

       This is an appeal under section 35-L (b) of the Central  Excise Act, 1944 (for short "the said Act").

       M/s Apex Traders, Sahibabad (hereinafter referred to as  "the assessee") were engaged in the manufacture of aerated  waters of brands, namely, Thums Up, Limca and Gold Spot in  the pack sizes of 500 ml. and 1000 ml. falling under chapter 22  of the schedule to the Central Excise Tariff Act, 1985.  The  assessee filed its price-list in part-I effective from 1.3.1994 in  respect of 1000 ml. and 500 ml. glass bottle packs of durable  and returnable nature.  They also filed the price-list in part-I  effective from 1.3.1994 in respect of plastic bottled packs of  1000 ml. of non-returnable nature of brands, namely, Thums  Up, Limca and Gold Spot.  The assessee claimed deduction  from the wholesale trade price on account of freight and rent on  containers (ROC).  By Finance Act, 1994, the Central Excise  Rules were amended and the practice of filing of price-list was  abolished.  Therefore, the assessee filed a declaration of  assessable value under rule 173-C of the Central Excise Rules,  1944 in respect of aforestated brands of aerated water effective  from 1.4.1994.  In this declaration, the assessee claimed  deduction from depot sale price on account of equalized freight  and on account of ROC on durable and returnable containers  i.e. glass bottle packing of 1000 ml. and 500 ml. of the  aforestated brands of aerated water.  

       The department found that the abatement claimed on  account of freight in the price declaration was on the higher  side as compared to what was claimed in the price list  submitted in March, 1994.  Hence, the assistant commissioner  ordered provisional assessment of the aforestated price- declaration filed by the assessee.  Ultimately, the assistant  commissioner finalized the provisional assessment vide order  dated 26.5.1998.  The assistant commissioner found that in the  case of M/s Coolade Beverages Ltd., Sahibabad, the  Commissioner of Central Excise, Meerut vide his order dated  17.6.1997 had held that ROC did not form part of the assessable  value and, therefore, relying on the order of the Commissioner  dated 17.6.1997, the assistant commissioner in the present case  concluded that the ROC was an admissible abatement from the  sale price.  Accordingly, the abatement claimed by the assessee  herein from sale price on account of ROC effective from  1.4.1994 was allowed.  At this stage, we may clarify that the

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order of the commissioner dated 17.6.1997 was the subject  matter of civil appeal No.772 of 2001 preferred by the  department which appeal has been dismissed by this Court vide  judgment of even date.   

       On the second issue of equalized freight, the assistant  commissioner came to the conclusion that the assessee sold a  part of its goods to independent dealers ex-factory and the rest  of the goods were sold by the assessee to its depot/branches.   The assistant commissioner came to the conclusion that the  assessee was clearing its goods at the same price from the  factory gate as well as from the depot and since the price at the  factory gate and the price at the depot was the same, the  assessment had to be done on the said price.  In the  circumstances, the assistant commissioner held that the  wholesale price charged by the assessee at the factory gate  should be treated as the assessable value under section 4 of the  said Act.

       Aggrieved by the aforestated decision on ROC and on  equalized freight, the department carried the matter in appeal to  the Commissioner (Appeals), Ghaziabad, who took the view  that although ROC was admissible as held by this Court in the  case of Collector of Central Excise v. Indian Oxygen Ltd.  reported in 1988 (36) ELT 730,  the burden was on the assessee  to provide records / data and certificates to justify the extent of  deduction claimed by the assessee for ROC and for equalized  freight.  According to the appellate authority, the assessee had  failed to provide the requisite data justifying the extent of  deduction on the aforestated two items.  In the circumstances,  the appellate authority allowed the department’s appeal.

       Aggrieved by the decision of the commissioner, the  assessee carried the matter in the appeal to the tribunal, which  took the view that the issue of ROC was already settled by the  decision of the commissioner dated 17.6.1997 in the case of  M/s Coolade Beverages Ltd.  As regards deduction on account  of actual freight, the tribunal took the view that since the  assessee had claimed Rs.0.60 per crate as deduction whereas  the actual expenditure per crate was Rs.3/- per crate as certified  by the Chartered Accountant of the assessee and since the depot  price and the factory gate price were the same, the appellate  authority had erred in interfering with the order of the  adjudicating authority.   Consequently, the tribunal restored the  order of the assistant commissioner and set-aside the order of  the commissioner.  

       At the outset, we may point out that in this case, we are  concerned with the quantum of abatement/deduction claimed by  the assessee on account of equalized freight and on account of  ROC.  We are not concerned with the admissibility of the claim  for deduction on account of ROC and equalized freight.  When  it comes to the question of quantum, the duty is on the assessee  claiming deduction to provide requisite data and certificates  from Chartered Accountant as well as books of accounts to  justify the quantum of deduction.  In the present case, on the  item of deduction for ROC, the assessee has not produced the  requisite data indicating the basis on which ROC is computed.   There is nothing to indicate as to when ROC became  chargeable.  There is nothing to indicate the rate at which ROC  was chargeable.  There is nothing to indicate whether the  amount of ROC was at all reflected in the invoices.

       Similarly, on the question of equalized freight, we find  that the assessee had sold a part of its goods to independent

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dealers ex-factory and the rest of its goods were sold to its  depot/branches.  In this connection, it may be noted that 25% of  the total sales was to independent buyers.  In other words, the  goods were partly sold at the factory gate and partly from the  depot.  The assessee has not led evidence to justify the extent of  the claim for deduction on account of actual freight.  The  assistant commissioner has failed to quantify, by actual facts  and figures, the actual extent of the freight allowable as  deduction.   

       In the circumstances, we remit the matter to the assistant  commissioner to decide the quantum of deduction/abatement  from the sale price in wholesale trade on account of freight and  ROC, in accordance with law.   

       Accordingly, the appeal filed by the department stands  allowed, with no order as to costs.