P.C. Jain, Member (T)

1. (Misc. Order No. 7 to 18/1987-A). - In these appeals a common question regarding a liability of duty on the element of selling expenses included in the sale price of the goods namely art silk fabrics falling under Item 22 of the Central Excise Tariff arises. Accordingly, a common order is being issued.

2. The appellant contended before the lower authorities that the selling expenses comprising of the following :-

"Salary & Wages, Advertisement expenses, Bank Charges, Business Promotion expenses, Travelling expenses, Commission to Selling Agents, Brokerage to Selling Agents, Incentive to Customers and Rebate to Customers".

were not liable to duty in view of the judgment of Supreme Court in the case of A.K. Roy and Anr. v. Voltas Ltd. 1977 ELT (3) 177 inasmuch as the said judgment stated that excise duty is leviable only on the manufacturing cost plus manufacturing profit.

3. The lower authorities have not accepted the contention of the appellants.

4. The appellants, keeping in view the judgment of the Supreme Court in Union of India v. Bombay Tyre International Ltd. 1983 ELT 1896 (S.C.) and further clarification by the Supreme Court reported in 1981 (17) ELT 329 (SC) with regard to trade discounts restrict their claim now only to "incentive to customers and rebate to customers" which they claim are nothing but trade discounts. These trade discounts, according to the appellants, were denied to them at the time of approval of the price lists. The claims pertained to the period August 1972 to July 1973. All the claims were filed within the time limit of one year stipulated at that time in Rule 173-3 read with Rule 11. The learned advocate appearing for the appellant on 11.7.1986, the date of hearing, urged that the cases be remanded to the original authority for determining the amount of refund in respect of trade discounts referred to above because the original claim was in respect of much larger amount comprising various other selling expenses.

5. On a query from the Bench as to why an appeal against the price list approved by the lower authorities was not filed, the learned advocate submitted that the matter was in correspondence with the lower authorities and in that connection he drew attention to Annexure 'A' to the appeal memo. In any case, he submitted that it is an unconditional right of the appellants to file refund claims in respect of any duty which he claims to have been paid in excess of terms of Rule 11 read with Rule 173-3 as it existed then and Section 11B as it exists now. Only limitation which was stipulated in the Rule was that the refund claim ought to have been filed within one year of the date of payment of duty. In this connection, he relied upon Karnataka High Court's judgment in the case of Shyam Sunder U. Nichani v. Assistant Collector of Central Excise, Bangalore MANU/KA/0070/1985 : 1985 (22) ELT 751 (Karnataka). In that case, learned advocate for the appellants submitted that the High Court has held that the provisions of Section 11A of the Act for demand of duty were clearly applicable even though the classification had been approved earlier at a lower rate of duty. On this analogy he submitted that provisions of Section 11B (Rule 173-3 read with Rule 11 at the relevant time) would apply even if the price list had been approved at higher value. He also relied upon Tribunal's order No. 142 to 153/86A dated 28.2.86 in ED/SL/T/212/79A and ED/SB/T/A. No. 1177-1187/84-A. In this connection, he read out para 4 of the Tribunal's order. It is reproduced below :-

"The next point argued by the learned Counsel for the appellants in regard to the finding that the appellants should have filed appeal against the approval of the price list and not having done so, it has to be taken that they had agreed to pay the duty at higher assessable value. He pleaded that this finding is erroneous inasmuch as the provision regarding claiming a refund is still available to them notwithstanding the fact tha