- (1.) This appeal is against the judgment of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi dated 6/10/1998.
(2.) The question which arises for determination is: whether receipt of advance and the income accruing thereon has gone towards depreciation of the sale price.
(3.) A conspectus of decisions shows that inclusion of notional interest in the assessable value or wholesale price will depend on the facts of each case. In the present case, according to the adjudicating authority, the evidence indicated that the main object behind receiving advance from the customers was not security but collection of capital. In this connection, reliance was placed on financial accounts, MIS reports, pricing and costing. The said material was put to the officers of the Company. The adjudicating authority found on evidence that the advances were invested and income therefrom by way of interest, dividends, etc. constituted additional flowback (consideration) from the customer to the assessee. In this connection, the adjudicating authority found that interest at 9% was actually paid by the assessee to each of the customers; that the interest was shown as cost of production; that it was charged to cost of production; that the said expense was incurred under the head "sales" which implicated "sales income" with "other income". On examination of the balance sheet, profit and loss account and costing data, the adjudicating authority found that but for "other income", the assessee was required to increase the prices to recover the cost of manufacture. The adjudicating authority further found that this "other income" accrued to the assessee in the course of sale. The said authority found that the said "other income" formed part of the prices. That, the difference in the interest paid to the customers and the interest earned on the advances received from the customers constituted "additional consideration" which flowed back from the customer to the assessee. The adjudicating authority further found difference between the current assets and current liabilities in the final statements indicating utilisation of advances to meet the working capital requirement. The adjudicating authority further found that the payment of interest to the customer was shown in the books as cost of production whereas the income received on deployment of funds (advances) has been shown as income from sales and other income. The adjudicating authority found understatement of assessable value on account of failure on the part of the assessee to take into account the additional consideration arising on account of difference in the rates of interest.;