Judgment

SABYASACHI MUKHARJI, J. These are appeals under S. 35L(b) of the Central Excises & Salt Act, 1944 (hereinafter called the Act).

2. The appellant manufactures compressed Oxygen and dissolved acetylene falling under tariff item No. 14H of the First Schedule of the Act as it stood at the relevant time. The appellant had received show-cause notice in respect of the period from 1-1-1984 to 31-1-1984 and also five other show-cause notices for different period, in respect of the price lists submitted by the appellant seeking approval of the price list of gases in question. It was found by the Tribunal that the appellant manufactures and sells oxygen and D.A. Gases. These are sold from the factory of the appellant at Visakhapatanam and from their depot/service centres at Vijayawada. Rajamundry, Vadlapudi Jeypore and Damanjodi. They sell their produce to Government undertakings as per the rates determined by DGS & D, New Delhi. In respect of other buyers the appellant sell their product at various prices on slab basis. It is stated that the slab basis is related to what the manufacturers call a quantitative discount. According to the Tribunal, the revenue had undertaken verification of the prices charged by the manufacturers at their depots and service centres. These were found to be much more than the prices indicated in the approved price list. It also observed that the manufacturers did not furnish to the department quantities of their product which were sold from their depots/service centres and that the appellant charged from their buyers, apart from the declared price list, the following :-

(i) Delivery and collection charges (where applicable):

(ii) Cylinder deposit: and

(iii) Rentals.

3. The departments case was that these being additional charges should form part of the assessable value.

4. It was urged on behalf of the revenue that the price list submitted by the manufacturers in respect of clearances from their Vijayawada depot the appellant claimed abatements on account of freight and handling charges in respect of which they did not produce any evidence. It was, therefore, held by the Department that no such deduction was admissible. It, however, appeared to the Tribunal that the manufacturers have admitted that separate prices were indicated for the same goods in respect of Visakhapatnam factory which is the place of manufacture and Vijayawada, a place about 400 Km. away which is only a depot. It was explained that the difference in the prices was in consideration of special delivery and collection charges which were admittedly incurred for transporting the goods from Visakhapatnam to Vijayawada.

5. The Tribunal noted that the appellant had not come forward to offer concrete evidence of actual freight charges etc. It, however, emphasised that the price at the factory gate is ascertainable. Assessment should, therefore, be made in terms of that price. Hence, there was no scope of deduction from that price. It, therefore, directed that if the ex-factory prices were not ascertainable and the goods were to be assessed ex-depot, then it would be for the manufacturer to claim on the basis of actual evidence. It remanded the case to the Asstt. Collector to refix the assessable-value as directed. It is necessary to reiterate the principle upon which the assessable-value will have to be determined in this case. The cost of transportation from factory at Visakhapatnam and the depot at Vijayawada cannot be included normally in computation of the value. The value has to be computed under S. 4(1)(a) read with S. 40)(d)(i) of the Act, where the wholesale price is ascertainable at the factory gate, the question of transportation charges becomes entirely irrelevant. The cost of transportation from the factory gate to the place of delivery and transit expenses are not to be added to the wholesale price at factory gate for purposes of duty under the Act. In this case the price of the goods at the factory gate Visakhapatnam is known. It is