S.V. Maruthi, Member (J)

1. The appeal arises out of an order of Collector of Central Excise disallowing the deductions claimed by the appellants from the assessable value of synthetic detergent powder.

2. The facts in brief are the appellants M/s. Guljag Chemicals & Plastics Pvt. Ltd. engaged in the manufacture of Synthetic Detergent Powder. They entered to an agreement with M/s. Index Port Ltd. (I.E.L. in short) (wholly owned subsidiary of M/s. Hindustan Lever Ltd.) under which they produce and manufacture "wheel" detergent powder for and on behalf of Index Port Ltd., Bombay. IEL supplies all raw-materials including packaging material such as polythene pouches and HDPE bags and the appellants receive and hold all such material on behalf of IEL, carry out processing of these raw-materials into finished products as per the instructions of IEL, and pack the detergent powder under the brand name "wheel" belonging to IEL. The detergent powder is packed in retail pack size of 1 Kg. polythene pouches and 50 number of such polythene pouches and then packed in HDPE bags. The finished product is then despatched by the appellants to the specified destination as per instruction of IEL, and goods are cleared from their factory on payment of duty. The price lists are filed on the basis of price at which IEL sold in the wholesale market. IEL in turn despatches the goods to their depots (Clearing & Forwarding Agents) and from there, the goods are sold and delivered by them to their duly appointed re-distribution stockists. The stockists sell the goods in wholesale market. The appellants were authorised under Notification No. 305/77 dt. 5-11-1977. The appellants filed 13 price lists in Part I and claimed the following deductions :

1. Cost of durable and returnable HDPE bags.

2. Freight incurred in movement of finished goods from factory to wholesalers.

3. Handling expenses incurred after removal of goods from the factory gate till delivery to wholesalers.

4. Expenses and remuneration paid to Clearing and Forwarding Agents (C&FAS) for storage, handling and onward despatches to wholesale buyers.

5. Discount allowed to wholesale dealer for damages suffered during transit.

6. Quantity discount allowed to trade.

7. Turn-over tax.

8. Bank charges for collection of sale proceeds.

9. Interest on finished goods in stock at depots after removal from factory gate.

3. The Asstt. Collector issued a show cause notice requiring the appellants to show cause notice as to why the deductions claimed should not be disallowed. On receipt of reply, the Asstt. Collector approved the price list by disallowing the deductions claimed by the appellants. However, the Assistant Collector allowed freight, turn-over tax and Central Excise duty. On appeal the Collector confirmed the order of the Assistant Collector. Hence the appeal before us.

4. The main contention of Shri Lodha, Advocate for the appellants is that the eligibility for the deduction of handling expenses, remuneration paid to the Clearing Agents and discount on damages is covered by an order of the Tribunal in Tungbhadra Industries Ltd. v. Collector of Central Excise, MANU/CE/0402/1992 : 1992 (60) E.L.T. 512 . Therefore, following the said order, the appellant is entitled to these deductions. As regards, eligibility for deductions on interest on receivable, he submitted that the issue is covered by order of this Tribunal in Hindustan Gas v. Collector of Customs, MANU/CE/0021/1991 : 1992 (59) E.L.T. 306 .

5. Shri Lodha further submitted that HDPE bags being durable and returnable packing the cost of which is not includible in the assessable value of detergent powder. He relied on the judgment of the Supreme Court in K. Radha Krishaiah v. Inspector of Central Excise, MANU/SC/0301/1986 : 1987 (27) E.L.T. 598 , Mahalakshmi Glass Works (P) Ltd., MANU/SC/0265/1988 : 1988 (36) E.L.T. 727 , Collector of Central Excise v. E.I.D. Parry (India) Ltd., MANU/CE/0383/1988 : 1989 (40) E.L.T. 139 . He also brought