COMMISSIONER OF CENTRAL EXCISE, CHANDIGARHversusM/S SUPREME FABRICS LTD.

A      COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH
                             v.
                MIS SUPREivffi FABRICS LTD.

                           DECEMBER 12, 2007
B
         [S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ.]


         Central Excise Act, 1944:

c       s. 3(4)(d)(ii)-Loading charges incurred while effecting clearance
  from factory gate-Assessee claiming deduction/abatement from
  assessable value-HELD: Tribunal rightly held that as demand ofduty
  on 'loading charges' arose subsequently and the amounts were total
   consideration collected as loading charges, the same should be taken
D as cum-duty prices and demand to be calculated after allowing
  abatement of excise duty payable.

         Srichakra Tyres Ltd v. Collector ofCentral Excise, Masdras, (1991)
    108 ELT 361 (Tribunal), followed.
E       CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2873 of
    2002.
         From the Final Order No. 16/2002-A dated 8.1.2002 passed by
    the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi
    in Appeal No. E/13 72 2001-A with E Cross/170/2001-A.
F
         R.S. Shukla, Vikas Sharma and Rashmi Malhotra (for B. Krishna
    Prasad) for the Appellant.
         The following Order of the Court was delivered:
G                                 ORDER
         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
H                                    468
                COMMISSIONER OF CENTRAL EXCISE,                               469
              CHANDIGARH v. MIS SUPREME FABRICS LTD.

     j
         if so whether the Department was obliged to make the demand after A
         allowing abatement for central excise duty payable on such loading charges
         [see para 2(ii) of the civil appeal paper book].
              Mis Supreme Fabrics Ltd., Ludhiana claimed deduction from
         assessable value on account of loading charges incurred while effecting
                                                                                 B
         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 ofloading charges was includible in the assessable value. The AO
         took the view that the assessee had omitted to include such loading charges c
         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 D
         includible in the assessable value, however, following the judgment of the
         Tribunal in the case in 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:                   E
               "Regarding 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 F
               treating it as cum-duty price for determination of the assessable
               value and quantum of duty demand payable. [Srichakra Tyres Ltd
               & Ors. v. CCE (1999(32)RLT-I(CEGAT)]. As in this case demand
               of duty on 'loading charges' has arisen subsequently and these
               amounts are total consideration collected as loading charges should G
-/
               be taken as cum-duty prices and deinand has to be calculated after
               allowing abatement of C.Ex.duty payable."
         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. H
    470 SUPREME COURT REPORTS                     [2007] 13 (Addi.) S.C.R.


A       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
B 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
C in 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
D production. Secondly, we find from the record that the Department's Civil
  Appeal Nos. 5862-63 of 1999, which has been referred to in the synopsis
  at page 'D' have been dismissed by three-Judge Bench ohhis Court vide
  Order dated 26.2.2002, which are reproduce hereinbelow:
               "After hearing the learned counsel for the parties on the facts
E          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,
                                                                                   I
F          therefore, the element of duty in the increased amount had to be
           deducted. The appeals are dismissed.
               No costs."
                                                           (emphasis supplied)
G
          For the aforestated reasons, there is no merit in the civil appeal and
    the same is accordingly dismissed with no order as to costs.
    RP.                                                    Appeal dismissed.