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Cheque discounting charges is an interest &not includible in assessable value of goods for levying Excise Duty

Cadbury India Ltd. Vs. Commissioner of Central Excise-Indore [(2014) 48 taxmann.com 78 (New Delhi – CESTAT)]

Cadbury India Limited (“the Appellant”) filed an appeal against the order of the Commissioner (Appeals) wherein the learned Commissioner held that the cheque discounting charges would be includible in the assessable value of the goods.

Being aggrieved, the Appellant filed  an appeal before the Hon’ble CESTAT.

The Appellant relied upon the finding of the Apex Court in the case of CCE Vs. Vikram Detergent Ltd. [2001 (127) ELT 641] wherein it had been held that bank charges in respect of clearance of outstation cheques weren’t includible in the assessable value of the goods. Further, the same view had been taken by the Hon’ble Tribunal in case of Hindustan Lever Ltd. Vs. CCE [1997 (89) ELT 720 (Tri.)], that cheque discounting charges weren’t includible in the assessable value of goods.

The Hon’ble CESTAT held that cheque discounting charges is nothing but interest charged by the bank for delay in realization of payment. Further, the Hon’ble Tribunal relied upon the judicial pronouncement of the Apex Court in the case of Government of India Vs. Madras Rubber Factory Ltd. [1995 (77) ELT 433] wherein it was held that cheque discounting charges wouldn’t be includable in the assessable value of goods. Accordingly, it was held that cheque discounting charges are not includible in the assessable value of goods.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)

Categories: Excise Duty
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