Hindustan Zinc Ltd vs Commissioner Of Central Excise ...

[Arising out of Order-In-Appeal No 301-2006 dated 30/03/2007 passed by CCE(Appeals), Visakhapatnam]

For approval and signature:

HON'BLE Shri JUSTICE G. RAGHURAM, PRESIDENT

HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

HINDUSTAN ZINC LTD ZINC SMELTER, VISAKHAPATNAM Appellant(s)

Versus

Commissioner of Central Excise ,Customs and Service Tax VISAKHAPATNAM-I NULL CENTRAL EXCISE BUILDING PORT AREA VISAKHAPATNAM - 530035 ANDHRA PRADESH Respondent(s)

Appearance:

Shri G.P. Sastry, Advocate G.R. KUMAR AND CO.

NO.9, MERRY LIFE APPARTMENTS, DOCTOR'S COLONY, PEDA WALTAIR, VISAKHAPATNAM - 530017 AP For the Appellant

Shri S. Raju, AR For the Respondent

Date of Hearing: 04/02/2015

Date of Decision: 04/02/2015

CORAM:

HON'BLE Shri JUSTICE G. RAGHURAM, PRESIDENT

HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 20278 / 2015

Per : B.S.V. MURTHY

It is noticed that appellants had collected ground rental charges of Rs.5,38,501/- for the scrap from the customers who had not lifted the same after sale from the appellant premises within stipulated time. It has been held that the ground rent collected has to be treated as part of the assessable value for the purpose of payment of central excise duty. This has resulted in demand for duty of Rs.86,161/- with interest and imposition of penalty equal to duty.

2. Learned Counsel submits that ground rent cannot be part of the assessable value since it was collected as storage charges for the scrap from the customers and it is in the nature of penalty for over due retaining of the material in the factory premises of the appellant. He relies on the decision in the case of CCE, Raipur vs Sail Bhilai Steel Plant 2013(296) ELT 400 (Trib.DEL.).

3. We have considered the submissions. In the case of SAIL (supra), the customers were required to make the payment within 28 days from the date of sale and if they failed to make the payment they were required to pay ground rent at the specified rates. The Tribunal took a view that the ground rent is payable as per the terms and conditions of sale which provided for delay in payments and the amount collected is in the nature of interest on receivables and was not includable in the assessable value. In the present case, it is not the case that payment for the scrap has not been made by the customer. Even if he makes the payment, if the scrap is left without taking delivery, the appellants charged the so called ground rent. In this case, there is no evidence to show that goods have been removed from the factory gate. The date of removal of the goods from the factory gate by the customer is the date for finding the transaction value of the goods. No invoice has been produced before us. In the absence of any evidence to show that the amount charged is for delayed payment as per the conditions of the sale and is in the nature of interest, the price charged by the appellant at the time of removal of the goods would be liable to excise duty. In the above situation, we do not find any merit in the appeal filed by the appellant. Accordingly appeal is rejected.

(Operative portion of this order pronounced in the court)

JUSTICE G. RAGHURAM PRESIDENT

B.S.V. MURTHY TECHNICAL MEMBER

M. Manjula 3