COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH versus M/S SUPREME FABRICS LTD.

Citation: [2007] 13 S.C.R. 468 · Decided: 12-12-2007 · Supreme Court of India · Bench: S.H. KAPADIA, B. SUDERSHAN REDDY · Disposal: Dismissed

Judgment (excerpt)

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 of duty 
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 of Central 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 
F in Appeal No. E/13 72 2001-A with E Cross/170/2001-A. 
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 groun

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