Per Justice K. Sreedharan : Identical issues arise in these appeals. So, we consider it advantageous to dispose of them by a common order.

2. When appeals E/1698 - 1701/99 - A came up before a Bench of two Members, decisions of coordinate Benches were brought to its notice. Apparently, conflicting views were taken by different Benches on the question of deduction to be given on the sale price on account of interest on receivables claimed by the manufacturer for finding out the assessable value. In such a situation, that Bench referred the appeals for decision by a larger bench of three Members. That is how these appeals have come up before us.

3. Before dealing with the facts in the appeals pending before us, we will examine the question of law regarding the deduction to be made of interest on receivables for finding out the assessable value of the goods. One of the heads of deduction claimed by the manufacturers relates to interest on receivables. What is meant by interest on receivables ? This is nothing but interest realized from purchasers who get benefit of credit sale. If the sale is on credit for a fixed price and the same is payable within a fixed period mentioned in the invoice, the sale will be a credit sale. The interest on the price for the period of credit is inbuilt in the said price. The price showed in the invoice may not include the interest separately from the price of the goods covered by the same invoice. So, the price mentioned in the invoice is inclusive of the interest on account of the delayed payment. That price mentioned in the invoice is payable by the purchaser within the period mentioned therein. It means that the price is inclusive of the interest on the sale consideration for the period during which the payment is postponed. Putting it in other words, the invoice makes mention of price realisable by a future date. Excise duty is to be assessed on the value at the time and place of removal. So, the price payable at a future date has to be worked back to bring it to the price on the date of removal. For finding out the value of the goods as on the date of removal, interest on the price for the period during which the payment is deferred has to deducted.

4. The above aspect was considered by their Lordships of the Supreme Court in the first decision relating to Madras Rubber Factory Ltd. reported in 1987 (27) ELT 553. Their Lordships examined the issue when buyers effected payment much after the date of sale. The adjustment between the manufacturer and the dealer where credit facility is extended is to be made in the value of the goods for assessment of duty. Relying on the decision in the case of Bombay Tyres International Ltd. reported in 1983 (14) ELT 1896, their Lordships took the view that expenses incurred on account of factors which have contributed to its value up to the date of sale or the date of delivery are alone liable to be included in the assessable value and that interest, cost and expenses on sundry debtors or interest on receivables is an expense subsequent to the date of sale and removal of delivery of the goods and would be eligible to be deducted for finding out the assessable value. The first decision in MRF Ltd. was recalled on review and disposed by the decision reported in GOI vs. MRF Ltd. 1995 (8) RLT 517 (SC)=1995 (77) ELT 433. In this judgment, the question on the deductibility of interest on receivables was dealt with in paragraph 66 of the judgment. For a proper understanding of the law, we read that paragraph: -

"66. The case of the assessee (Madras Rubber Factory) is that where the goods are sold to up - country wholesale buyers and payments are received quite sometime later, it is indeed a case of sale on credit and, therefore, the interest charged from the date of delivery of goods till the date of realisation of the price thereof should be deducted from the value of the goods. The interest charged, it is submitted, is only in lieu of the time taken in making the