Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 4(4)(d)(ii) Central Excises and Salt Act 11A 1944-Ss.4(l)(a) |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Central Excises and Salt Act, 1944-Ss.4(1)(a), 4(4)(d)(ii), 11A-Excisable good~Valuation of for charging excise duty- Recovery of duties short levied--Limitation for-Assessee-manufacturer receiving interest free advances of large amounts from its wholesale buyer-Revenue reloading purchase price by notional interest on advances made to manufacturer and rejecting assessee's claim for deductions of rebates and discounts given to wholesale buyer- Held, notional rate of interest on advances given by buyer to manufacturer should be reloaded in the price so as to reflect correct price of goods sold by manufacturer--For a wholesale buyer concession by way of trade discount cannot be said to be uncalled for or a special treatment contrary to trade practice and the amount has to be deducted for computing normal price of goods- Manufacturer while submitting price lists suppressed details of interest free advances made to it by buyer which resulted in short levy of duty- Revenue justified in invoking period of limitation under proviso to s.11-A.The appellant-company carried on the business of manufacturing and marketing metal containers which were classified under Tariff Item No. 46 of the Schedule to the Central Excises & Salt Act, 1944, and were liable to excise duty ad volorem. The goods were manufactured as individual customers' requirement. One of such customer (the buyer company) entered into an agreement with the appellant where under the latter was to be paid as advance certain amount in consideration of maintaining a steady and regular supply of containers to the former allowing it certain discounts from the gross price of the containers. The appellant submitted to the Assisstant Collector of Central Excise, a price list in which the contract price of the goods sold to the buyer-company was shown as net price after deducting the discounts and the rebates. The Assistant Collector of Central Excise issued a notice dated 27.6.1984 to the appellant to show cause as to why the gross price indicated in the agreement should not be treated as the true price and the additional consideration by Way of interest accruing on the advances made by the buyer-company should notbe added thereto in order to arrive at the assessable value. Accordingly, a demand-cum-show cause notice was issued to the appellant where under the appellant was to pay basic excise duty and special excise duty for the period July 1, 1980 to November 30, 1984. After hearing the appellant, the Assistant Collector, Central Excise, confirmed the demand of duty and the special excise duty. On appeal, the Collector of Central Excise allowed the claim of the assessee relating to loading of ad hoc interest on the advance made by the buyer-company, but did not allow its claim regarding rebates and discounts given to the buyer-company. The assessee as well as the revenue filed appeals before the Customs, Excise and Gold (Control) Appellate Tribunal, which allowed the appeal of the revenue and dismissed that of the assessee, confirming the entire order of the Assistant Collector. Aggrieved, the assessee filed the appeals.It was contended for the appellant that the Tribunal had patently erred in restoring the loading of purchase price by the ad hoc interest on advance made by the buyer-company to the asessee and in rejecting the assessee's claim regarding rebates and discounts given to the buyer-company for being deducted from the gross price. It was also contended that only a shorter period of limitation was available to the revenue and the revenue authorities were not right in invoking the period of five years under the proviso to Section 11A of the Act. |
Judge | Hon'ble Mr. Justice S.B. Majmudar |
Neutral Citation | 1995 INSC 17 |
Petitioner | Metal Box India Ltd. |
Respondent | The Collector Of Central Excise, Madras |
SCR | [1995] 1 S.C.R. 136 |
Judgement Date | 1995-01-10 |
Case Number | 215-16 |
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