per : M. Veeraiyan, Member (T)]. - Appeal No. E/1387/2005 filed by M/s. Krishna Mohan Beverages & Constructions (P) Ltd. (presently known as Pearl Bottling Pvt. Ltd.) (hereinafter referred to as the appellant or the assessee) is against the order of the Commissioner No. 22/04-05(RP), dated 28-1-2005 by which a sum of Rs. 21,47,581/- stands demanded after finalization of provisional assessment relating to the period 1-3-1994 to 31-10-1995. This appeal was initially filed before the Delhi Bench of the Tribunal and stands transferred to this Bench vide its order dated 7-6-2011.

1.2 Appeal No. E/158/2006 is by the Department against the same order of the Commissioner contending that the Commissioner should not have dropped the demand on the portions of value representing cost of advertisement and on the notional interest on advance deposit.

1.3 As the two appeals arise out of common order-in-original, and involve common facts and legal issues, they are being disposed of by this common order.

2. Heard both sides at length on 24-7-2012. They were specifically permitted to file decisions on similar valuation disputes and accordingly, they filed written submissions including citations and the same were taken on record on 31-7-2012.

3. The relevant facts, in brief, are as follows :-

(a) The appellant-assessee is a manufacturer of aerated waters falling under Chapter 22 of the Central Excise Tariff which was subject to specific rate of duty till 28-2-1994, ad valorem based duty during the period 1-3-1994 to 31-10-1995 and was subject to duty based on tariff value w.e.f. 1-11-1995. The dispute relates to the period 1-3-1994 to 31-10-1995 when the impugned goods were subject to ad valorem duty.

(b) The assessee filed a price list No. 5/93-94 dated 3-3-1994 effective from 1-3-1994 in respect of different varieties of aerated waters (like Pepsi, Team, Miranda, 7up etc.) manufactured by them. The Assistant Commissioner approved the price list provisionally and communicated the same to the assessee vide letter dated 21-9-1994. The assessee executed a bond for Rs. 6 lakhs with bank guarantee of Rs. 1 lakh and effected clearances based on the provisionally approved prices.

(c) A show cause notice dated 30-9-1994 was issued answerable to jurisdictional Assistant Commissioner, inter alia, alleging that two of the distributors viz. M/s. S.R. Enterprises and M/s. Bell Marketing Corporation were related persons; that they were collecting amounts on behalf of the assessee from the retailers; that they have failed to declare such collections and therefore directing them to show cause as to why -

(i) M/s. S.R. Enterprises, Visakhapatnam and M/s. Bell Marketing Corporation, Visakhapatnam should not be treated as related persons in terms of Section 4(4)(c) of the Central Excises and Salt Act, 1944 and why an Annexure in form-I should not be called for as proviso to Rule 173C(i) read with Notification No. 4/94-C.E. (N.T.), dated 1-3-1994 communicated in Trade Notice No. 15/94 dated 25-3-1994 and why the assessable value/sale price adopted by M/s. Bell Marketing Corporation and M/s. S.R. Enterprises should not be adopted for M/s. K.M.B.C. for assessment purposes;

the advertisement charges, rentals, transportation charges and (ii) advance deposit with interest collected from the retailers through the abovesaid distributors should not be added to the assessable value of aerated waters manufactured by the assessee from 1-4-1994 onwards as per Rule 6 of Central Excise Valuation Rules, 1975.

a B-16 General Security Bond for Rs. 10 lakhs with a bank (iii) guarantee for Rs. 2.5 lakhs to cover up the differential amount of duty involved on adding the abovesaid extra considerations to the assessable value should not be fixed and insisted upon as called for in this office letter of even No. dated 21-9-1994 to cover up the clearances under the P.L. No. 5/93-94 also;

the Central Excise duty arrived at after calculation from (iv) 1-4-1994 on the differential value of go