A. INFRASTRUCTURE LTD. versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR

Citation: [2004] SUPP. 2 S.C.R. 108 · Decided: 05-05-2004 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
A. INFRASTRUCTURE LTD. 
V. 
COMMISSIONER OF CENTRAL EXCISE, JAIPUR 
MAY 5, 2004 
B 
[S. RAJENDRA BABU, CJ. AND G.P. MATHUR, J.] , 
Central Excise Act, 1944; Section 35L(b) : 
Valuation-Goods manufactured and sold by the ussessee to 
C Government/Public Section Undertakings-Delay in payment of price-
Deduction on interest accrued on receivable/advances and bank charges-
Rejected by Revenue authorities-Affirmed by Central Excise and Gold 
Control Appellate Tribunal on ground that the contract did not specifically 
provide for stipulation as to payment of interest-On appeal, Held : 
D Mentioning of a particular period of payment in the agreement to sale 
invoice indicates that the payment would not be made immediately-It 
could be termed as credit sale-Deductions could be allowed on interest 
charged thereto-However, the circumstances as noticed by the Tribunal 
itself could not be a decisive factor-Hence, the Tribunal ought not to have 
E directed the authorities concerned to confine their investigation to the 
limited aspect of the matter but should have directed them to investigate 
the entire matter-Interest on receivable on account of time lapse in 
realization of price and also bank charges whether deductible from the 
price/valuation of the goods--Revenue authorities to examine--Tribunal's 
order modified accordingly. 
F 
Assessment-Bank charges-Deductions-Held : They are in the 
nature of post-manufacturing and post-clearing expenses and could be 
deductible from the assessable value of the goods. 
G 
The question which arose for consideration in these appeals was 
as to whether interest accruing on advances and Bank charges are 
deductible from the price for the purpose of assessment of value of the 
goods. 
H 
Allowing the appeals, the Court 
108 
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A. INFRASTRUCTURE LTD. v.C.C.E 
109 
HELD: 1.1. The question whether in a given case the price structure A 
itself includes the interest charged or not is a matter for establishment 
on evidence. The fact that a particular period for payment is mentioned 
would indicate that the payment is not to be made immediately but at 
a subsequent date and that is credit sale and interest could be charged 
and deducted out of the sale price. But that circumstance, by itself, is not B 
a decisive factor. Therefore, the Tribunal while remanding the matter 
should not have limited the investigation of the matter only to cases 
where the period has been subsequently stated in the invoice. Hence, the 
Tribunal ought not to have confined the investigation by the concerned 
authority after remand to only that aspect of the matter and should have C 
investigated the entire matter. [112-F-G-H] 
1.2. If the invoice price is the basis for valuation, bank commission 
or interest charges payable to the bank in the account of the customer 
are definitely in the nature of post-manufacturing and post-clearing D 
expenses and should be deductible from the assessable value. It cannot 
be stated that such expenses would form part of the sale price. Further, 
bank charges included in the price on account of clearance of outstation 
cheques cannot form part of the price of the goods at the time of 
removal and as such excludible from the price while calculating the E 
assessable value of the goods. Hence, the order of the tribunal is 
modified and the authorities to whom the matter have been remanded 
are directed to examine the question as to whether interest on 
receivables arises on account of time lapse between the delivery of 
goods and the realization of monies is deductible from the assessable 
value of the goods at the time of removal from the factory of the F 
assessee and as to whether the bank charges includible in the price on 
account of clearance of outstation cheques. [113-A-B, D, F-G] 
Commissioner of Central Excise, New Delhi v. Vikram Detergent Ltd., 
[2001] 2 sec 417; Asstt. Collector of Central Excise & Ors. v. Madras G 
Rubber Factory Ltd., (1986] Supp. SCC 751 and Shriram Fertilizers & 
Cher/iicals v. Union of India, (1997) 96 ELT 12 SC, relied on . 
..., ... 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5756-59 
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SUPREME COURT REPORTS [2004] SUPP. 2 S.C.R. 
From the Judgment and Order dated 6.6.2000 of the Central Excise, 
Customs and Gold (Control) Appellate Tribunal, New Delhi in E.O. Nos. 
348-355/2000-A in A. Nos. E/1698-1701/99-A, E/1077/98-A, E/1278/99-
A and E/14-15/2000-A. 
D.A. Dave, R.N. Karanjawala, Ms. Ruby, S. Ahuja, Ms. Seema 
Su
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