Siba Prasad Rajkhowa, J. - (1.) Pursuant to the order of this Court passed on 2-5-1989 in F.M.A.T. No. 1077 of 1989, the petitioner Company submitted replies before Assistant Collector of Central Excise, Dum Dum Division No. 2, St. Georges Gate Road, Calcutta 22, hereinafter referred to as respondent No. 2 to all the show-cause notices issued by the Superintendent of Central Excise, Dum Dum Division Range VI (Respondent No. 3) under Memo No. C. No. CE (13)/9/NIC/R-Y/DD/89/415 dt. 26th June 1989 upon the writ petitioner. By the said show-cause/demand notices the respondent No. 3 directed the writ petitioner to deposit Central Excise Duty on account of credit charges in respect of the credit sales of the petitioner company for the periods as shown in the aforementioned notices.
(2.) It has been alleged in the show-cause notices that the petitioner company, holder of Central Excise Licence in Form L-4 No. 8/Glass/61(1) engaged in manufacturer of excisable goods, glass bottles, phials falling under chapter heading sub-heading No. 7007.90 of the Schedule to the Central Excise Tariff Act, 1985 had been availing of the benefit of small-scale exemption under the Govt. of India's Notification No. 175/86 dt. 1-3-1986 as mentioned and was found to have charged and collected the amounts as credit charges, transport charges and packing charges in addition to the amount calculated as cum duty value in the bills/gate passes during the period from October 1987 to September 1988. It appeared on scrutiny of the records maintained by the petitioner company that their major sale was credit sale and hence the extra realisation as credit charges was nothing but an additional consideration flowing indirectly from the buyer to the assessee.
(3.) It further appeared on scrutiny of the invoices etc. submitted along with the R.T. 12 returns for the relevant period by the said company that they charged transportation cost from their customers and claimed abatement of the same for the purpose of Central Excise Duty. Scrutiny of some cases of assignments revealed that the transport charges in respect of the same had no relation with the cost of actual transportation charges or equalised freight. As such this transportation charges were to be treated as additional consideration to the price for the purpose of valuation as envisaged in Section 4 of the Central Excises and Salt Act, 1944 read with Rule 5 of Central Excise (Valuation) Rules, 1975.;