VST INDUSTRIES LTD. versus COLLECTOR OF CENTRAL EXCISE, HYDERABAD

VST INDUSTRIES LTD. versus COLLECTOR OF CENTRAL EXCISE, HYDERABAD

Notional interest on interest free security deposit cannot be added to the sale price to determine assessable value where the uniform wholesale price is charged to all dealers and the deposit does not influence the price. Rule 5 of the Valuation Rules does not apply under such circumstances.

Parties
Appellant: VST Industries Ltd.; Respondent: Collector of Central Excise, Hyderabad; Appellant: Venus Tobacco Company Pvt. Ltd.; Appellant: Hyderabad Deccan Cigarette Factory Ltd.
Jurisdiction
India
Judgment Date
08 January 1998
Procedural Posture
Civil Appeal / Appeal From Central Excise and Gold (control) Appellate Tribunal, Delhi Judgment Dated 23.8.90
Outcome
Appeal allowed
Legal Topics
Assessable Value, Notional Interest, Security Deposits, Central Excise, Valuation Rules
Excise Law Assessable Value Notional Interest Security Deposits Central Excise Valuation Rules

Case Brief

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Parties

VST Industries Ltd.

Appellant

Collector of Central Excise, Hyderabad

Respondent

Venus Tobacco Company Pvt. Ltd.

Appellant

Hyderabad Deccan Cigarette Factory Ltd.

Appellant

Procedural Posture

Civil Appeal / Appeal From Central Excise and Gold (control) Appellate Tribunal, Delhi Judgment Dated 23.8.90

Legal Issues

  1. 1 Whether notional interest on interest free security deposit should be added to the sale price to determine the assessable value under the Excise Act.

Ratio Decidendi

Notional interest on interest free security deposit cannot be added to the sale price to determine assessable value where the uniform wholesale price is charged to all dealers and the deposit does not influence the price. Rule 5 of the Valuation Rules does not apply under such circumstances.

Court Disposition

Appeal allowed

Orders

  • Order of the Central Excise and Gold (Control) Appellate Tribunal, Delhi is set aside.
  • Extra demands raised by the respondent pursuant to show cause notices are quashed.