D.N. Lal, Member (T) and S. Venkatesan, Sr. Vice President

1. As the issue involved in the two appeals, originally preferred as revision applications before the Central Government, is identical and flow from a common order-in-appeal dated 24-3-1977 passed by the Appellate Collector of Central Excise, New Delhi, the same were taken up for hearing and disposal together. The case of the appellants as set out at length by their advocate Shri Bedi is as follows :

2. The appellants are engaged in the manufacture of aerated waters and at the relevant time had two such units, one at Connaught Lane and the other at Najafgarh Road. The aerated waters were brought under the Central Excise Tariff w.e.f. 1-3-1970 (Item 1-D GET). The rate of duty was on ad valorem basis. The appellants wrote a letter dated 1-3-70 addressed to the Superintendent, Central Excise, MOR HI stating as under :

"Kindly approve the following wholesale prices of our aerated water as shown below :-

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The Superintendent made the following endorsement dated 5-3-1970 on the body of the said letter from the appellants.

"Provisionally approved subject to verification."

At the same time, the appellants were orally asked to give to the Superintendent information on the price structure as it prevailed prior to the levy of duty on aerated waters. Vide their letter dated 2-3-1970, addressed to the Superintendent, the appellants furnished their price structure as it was previous to the levy and as it was modified after the levy of excise duty. Shri Bedi laid stress on the fact that in this letter the appellants had given a clear indication that the price was inclusive of excise duty and distribution charges. In another letter dated 6-3-1970, written in continuation to their earlier letter dated 2-3-1970, the appellants explained that they were charging freight at 30 paise per crate for carting their goods to the retailers in Delhi and 70 paise per crate for carting the same to outstations like Karnal, Kurukshetra, Yamunanagar etc. In their letter dated 7-3-1970, the appellants clarified their sales structure further by indicating that the wholesale prices indicated in their letter dated 1-3-1970 were inclusive of distribution charges. The appellants made a specific reference to the prevalent sale pattern in the following words :-

"We may, however, mention in this connection that this arrangement may also be considered as provisional subject to the clarification as to whether excise duty Should or should not be charged on the expenses incurred towards our distribution charges."

This letter was followed by another letter dated 10-3-1970, wherein it was again stressed that/their wholesale prices for the various brands of aerated water manufactured by them were inclusive of distribution charges. In the said letter a specific clarification was sought from the department as to whether the excise duty should or should not be charged on the expenses incurred towards their distribution charges. In a communication captioned "Appealable Order" dated 31-3-1970, the Superintendent of Central Excise referred to the abovementioned correspondence and pointed out that the only deduction from the selling price for assessment purposes available to the appellants was the excise duty. It was also pointed out that 'distribution charges' whether for Delhi or for outstations were not deductions permissible in their case. Shri Bedi, the learned advocate for the appellants drew our pointed attention to the fact that the appellants were specifically told in the body of this "Appealable Order' that "Representation against this order lies to the Assistant Collector of Central Excise, MOD, New Delhi." Against the Superintendent's 'Appealable Order' dated 31-3-1970, the appellants represented to the Asstt. Collector vide their letter dated 21-5-1970 wherein they reiterated their earlier stand that they were entitled to deduct the average freight at the averaged rate of 30 paise per crate for deliveries