Lajja Ram, Member (T)

1. These are three appeals filed by M/s. Vijayawada Bottling Company Ltd., against (1) Order-in-Appeal No. 12/85(G)(2); (2) Order-in-Appeal No. 13/85(G), and (3) Order-in-Appeal No. 14/85(G), all dated 25th January, 1985, and all passed by the Collector of Central Excise (Appeals), Madras. As they raise common issues, they were heard together, and are being disposed of by this common order.

2. The appellants were engaged in the manufacture of aerated waters, falling under Tariff Item No. 1D of the erstwhile Schedule to the Central Excises and Salt Act, 1944, (hereinafter referred to as the 'Tariff'), and P or P foods, falling under Item 1B of the Tariff.

3. In the price lists filed, the appellants on their own, worked out and declared assessable values after deducting amounts towards what they considered their post-manufacturing expenses and selling profits.

4. The Assistant Collector, Central Excise, Vijayawada disallowed their claim for deduction of the so-called post-manufacturing expenses, and the so-called selling profits.

5. After the publication of the judgment of the Hon'ble Supreme Court in the case - Union of India v. Bombay Tyres International Ltd. 1983 (17) E.L.T. 329 (SC), the appellants dropped their claim for distribution expenses (except freight, which had been included in the distribution expenses), and advertisement expenses.

6. The price lists were finally approved in 1984 in the light of the judgment of the Hon'ble Supreme Court in the case of Union of India v. Bombay Tyres International Ltd. The Assistant Collector, Central Excise while finalising the price list allowed abatement of freight expenses but disallowed other abatement claims which the appellants have claimed to be the post-manufacturing expenses and the selling profits.

7. On appeal, the Collector, Central Excise (Appeals), Madras noted that the appellants have not been able to substantiate their claim for deduction as being legally admissible. As regards abatement of trade discount, he noted that the appellants have not been able to substantiate with documentary evidence that they do extend a trade discount to their buyers in the form of free coupons.

8. In the grounds of appeal, the appellants have made the following points :-

(1) As the petition was presented before the High Court well within the time limit of 3 months from the date of communication of the Assistant Collector's Order-in-Original, the appellate authority's finding that the appeal was time-barred, is not correct.

(2) The Supreme Court's judgment in the case of Bombay Tyres International was delivered only in respect of specific deductions involved and claimed in the bunch of appeals dealt with by them. That judgment was no bar against the appellants canvassing their claim for deductions in respect of the various items pressed by them before the Assistant Collector, Central Excise, and rejected by him;

(3) Regarding breakages of glass bottles/wooden crates, it was stated that most breakages occur after the goods leave the factory, in the premises of the wholesale dealers and retailers, as well as in the hands of the consumers. In their view, when the cost of the bottles/crates in sound condition is excluded from the assessable value, it would be quite odd for the department to seek to include the cost of the broken bottles/crates in the value of the goods under assessment. At the same time they contended that broken pieces had no relation to the excisable goods under assessment;

(4) The cost of repairs of the crates was an extraneous element unconnected with the assessment of excisable goods;

(5) The amounts by way of interest in respect of certain sums borrowed from banks for the purchase of materials, like glass bottles and wooden crates, are extraneous element for the purpose of calculation of assessable value, and do not qualify for inclusion in the value;

(6) Office expenses and other administrative expenditure were unconnected with manufacturing activities, o