I.J. Rao, Member (T)

1. The appellants manufacture aluminium wire rods out of duty paid E.G. grade aluminium ingots on behalf of various customers on job basis. During the period between 27-9-1974 and 31-5-1977 they collected a sum of Rs. 6,28,163.42 from their customers by issuing debit notes separately in addition to the amount shown in the regular invoices. The Revenue noticed that 916 such debit notes were issued during this period. A show cause notice was issued asking the appellants to show cause why this amount representing handling charges on raw-material should not be included to the invoice price of the clearances and differential duty recovered. It was alleged that there was a short payment of Central Excise duty to the tune of Rs. 2,34,267.25 of the clearances of wire rods effected during this period. It was also alleged that the appellants suppressed information about the collection of handling charges of raw-materials. The show cause notice was issued under Rule 10(i)(c) of Central Excise Rules, 1944. After due process, the Asstt. Collector confirmed the demand for differential duty.

2. Aggrieved, the appellants filed an appeal before the Appellate Collector of Central Excise who passed the impugned order dated 14-7-80 holding that inclusion of handling charges in respect of raw-materials in the assessable value was according to law. He also upheld the demand under Rule 10(i)(c) for the period after 6-8-77 (when rule 10 was amended) and under Rule 9(1) and 9(2) for the period prior to that date. The appellants filed a revision application before the Govt. of India against this order. The revision application, on transfer to the Tribunal, is being treated as an appeal.

3. In the memorandum of appeal and before us the appellants pleaded that their interest in the manufacture of wire rods was limited to conversion charges only as they work on job work basis. The handling charges for the materials are incurred by them on behalf of the customers and have no connection with the actual process of manufacture. Therefore, this expense not being relatable to manufacturing costs cannot be included in the assessable value. They argued that for the period from 27-9-74 to 30-9-75 the value had to be ascertained under the old Section 4 (the new revised Section 4 came into effect from 1-10-75). The appellant's argument is that since they do not sell wire rods, the value has to be fixed under Section 4(a) on the basis of the price at which goods of like kind and quality are capable of being sold. They referred to the levy price of aluminium introduced with effect from 15-7-75 and argued that there being no difference in quality and specification between 'levy' and 'non-levy' aluminium wire rods, the price of Rs. 7062 per tonne fixed by the Government should be deemed to be the price of the appellants' product during this period. In respect of the period prior to 15-7-75 i.e. before 'levy' price was introduced, the appellants submitted that only 55% of the total production was being allowed by the Govt. and the balance 45% was available in the open market. Therefore, the earlier fixation of value was correct and no addition should be made.

4. For the period commencing 1-10-75, the appellants argued that assessable value should be fixed under proviso (ii) to Section 4(i)(a) or under Section 4(1)(b) of the Act. In either case the levy price of Rs. 7062/- which had been statutorily fixed formed the normal price and therefore, the assessable value. Alternatively, the valuation has to be done under Rule 6(b)(i) of the Valuation Rules and as comparable goods were selling for Rs. 7062/-, this will be the assessable value.

5. The appellants also argued that the definition of sale price embodied in Aluminium Control Order, 1970 meant the ex-factory price payable to a manufacturer or producer or dealer and was inclusive of Excise duties, Central Sales Tax or local taxes and also of transportation charges and insurance charges. Therefore, ac