NDLI: Vst Industries Ltd. Vs. Collector of Central Excise, Hyderabad

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Central Excise (Valuation) Rule 1994: Section 4 Central Excises and Salt Act 1975: Rule 5
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Central Excise Act, 1944 (1 of 1944)
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Excise Law: Central Excises and Salt Act, 1994-Section 4-First Schedule Item- Central Excise (Valuation) Rule, 1975-Rule 5. Excise duty-Determination of assessable value -Addition of notional interest on interest free security deposit received to the sale price of the goods-Dealers availing credit facility given no discount by the appellant after taking security deposits-Wholesale price of the goods not influenced by such deposits-Held, notional interest cannot be added to the sale price to determine all the assessable value. The appellant has been carrying on business of manufacture and sale of cigarettes which is assessable to duty under erstwhile item No. 4 of First Schedule to the Central Excise & Salt Act, 1944. The appellant, vide circular · dated 22nd September, 1981, introduced credit facility scheme, if interest free security deposits were made with them with a view to cover the risk of credit sales extended to the bulk customers. The Collector of Central Excise issued show cause notice dated 28th December, 1987 to the appellant to add 12 % notional interest to security deposits for working out the assessable value. On receipt of reply the Assistant Collector of Central Excise Passed an order against the appellant. On appeal, The Collector of Central Excise (Appeal) set-aside part of Assistant Collector's Order. The appeal filed by the Respondents against the order was allowed by the Tribunal holding that notional interest should be considered for arriving at the assessable value. In this appeal challenging the decision of the Tribunal the appellants contended that the wholesale price charged by the appellant was not influenced by security deposits which some of the dealers had made who wanted to get goods on credit. Uniform price was charged form all the dealers irrespective of the fact whether the sale was made on cash basis or on credit. The Respondent contended that Rule 5 of Central Excise (Valuation) Rules, 1975 is applicable because price was not the sole consideration. The value of such goods has to be based on the aggregate of the price and the amount of notional interest on the security deposit received by the appellant.
Judge	Honble Mr. Justice B.N. Kirpal
Neutral Citation	1998 INSC 7
Petitioner	VST Industries Ltd.
Respondent	Collector Of Central Excise, Hyderabad
SCR	[1998] 1 S.C.R. 31
Judgement Date	1998-01-08
Case Number	2524

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