A.K.GOEL,AJAY TEWARI,JJ. - (1.) THE Revenue has preferred this appeal under Section 35G of the Central Excises and Salt Act 1944 (for short, "the Act") proposing to raise following substantial questions of law: (i) Whether the Department was justified in adding the notional interest on the advances to the sale price of the goods for the purpose of arriving at the assessable value? (ii) Whether the Excise duty is liable to be charged on the interest accrued on advance payments received by the assessee, from the date of receipt up to the date of clearance of excisable goods?
(2.) THE assessee was given a notice making demand on the basis of notional interest accrued on advances received from customers, not included in the assessable value. The said demand was confirmed. The assessee debited the amount under protest. In appeal, the amount in question was treated as pre -deposit under Section 35F of the Act for entertaining the appeal. In the profit and loss account for the year 1996 -97, under the head 'Excise Duty', entry of profit was made by the assessee on which basis refund was declined.
(3.) THE Appellate Commissioner held that amount deposited under Section 35F of the Act could not have been passed on and thus, there was no question of unjust enrichment and the assessee was entitled to refund. On appeal of the Revenue, the Tribunal affirmed the said view with the following observation:;