1. This appeal is directed againsl the order dated 10-3-1981 passed by the Appellate Collector of Central Excise, Madras. Originally a revision application was filed against the impugned order before the Central Government but on transfer it is being treated as an appeal.
2. Brief facts of the case are that the appellants manufacture textile spindles which fell under item 68 of the Central Excise Tariff at the relevant time. For valuation of their goods the appellants opted for the procedure as set out in Notification No. 120/75-C.E., dated 30-4-1975. The said notification provided an alternative mode of valuation under which a manufacturer whose goods were classifiable under item 68 of the C.E.T. could determine his duty on the basis of the invoice price (excluding the duty and local taxes, if any, included in such price). The said notification laid down, inter-alia, that it was optional for an assessee to get his goods valued with reference to the notification or as provided for under Section 4(a) of the Central Excises & Salt Act, 1944 (hereinafter referred to as the Act). It was further stipulated that an assessee who had opted for the valuation of his goods under the said notification could opt out of the same after giving 7 days notice in writing to the concerned Superintendent of Central Excise.
3. Shri Mahesh Kumar, the learned representative of the respondent stated the background of the notification and added that it was intended to provide a simpler way of valuation relieving the assessees of a lot of documentation work involved in the determination of assessable value under Section 4(a) of the Act.
4. Shri Chandrashekhran, the learned counsel for the appellants has pleaded that an assessee who had opted for valuation on invoice price basis in terms of Notification No. 120/75 was entitled to deduct the element of packing charges from the invoice price as such charges were of post manufacturing character. In other words, the point canvassed by the learned counsel was that while interpreting the notification in question, the provisions of Section 4, so far as post-manufacturing expenses are concerned, had also to be taken into account. In support of his contention he pleaded that some of the requirements stipulated in the notification were taken from the language of Section 4(a) of the Act, for example, independent relationship between the buyer and the seller, uniformity of rate, the price being the sole consideration for the sale etc. etc.
5. We must state at the outset that we find ourselves unable to accept the contentions made by the learned counsel for the appellants. It is pertinent to mention here that the exemption notification was optional in character. It was absolutely the discretion of an assessee to opt for being governed by the mode of valuation under the notification or under the normal provisions of Section 4(a) of the Act. Further, there was again the descretion available to the assessee to opt out of the exemption notification by giving 7 days notice to the Proper officer.
Thus, when an assessee opted to be governed by the provisions of the notification it was purely at his discretion and not under any compulsion or statutory obligation. The endeavour now being made by the learned counsel is that some of the deductions which have been held admissible as post-manufacturing expenses in the computation of assessable value of| excisable goods should also be made available to cases where the goods had been cleared on the invoice price basis under Notification No. 120/75-C.E. Acceptance of this contention would clearly amount to enlarging the scope of the exemption notification. As observed earlier, the notification states in very clear terms that the invoice price shall constitute the basis of assessment and the only constituents to be excluded from the said invoice price are the element of duty and local taxes, if included in such an invoice price. The notification does not permit the deductibility of any other constituents such as the packing charges. We, therefore, see a lot of force in the arguments advanced by Shri Mahesh Kumar, the learned representative of the respondent, that the basis of assessment under the exemption notification is a parallel or alternative mode of valuation under the Act. The two modes are not only parallel but mutually exclusive in their scope. Only where an assessee thought that it would be beneficial for him to be governed by the exemption notification, he opted for the same. Having once opted for the exemption notification, it was not possible for an assessee to wriggle out from the consequences which flew from the said notification. Again, as referred to earlier, this option was not of an all time binding character. It was open to an assessee to change the option by giving 7 days notice to the Superintendent of Central Excise. We are, therefore, of the clear view that some of the con- cepts germane to valuation under Section 4(a) of the Act cannot be imported into the exemption notification because this would enlarge the scope of invoice price basis which permits deduction of only two elements, namely, excise duty and local taxes, if any.
6. The learned representative of the respondent has submitted that even if for the sake of the argument the submission of the learned counsel were accepted, the element of secondary packing (which is subject matter of dispute in the present case), cannot be excluded from the assessable value as per the recent judgment of the Supreme Court [1983 E.L.T. 1896 (S.C.)]. We do not \ think it necessary to go into this aspect of the matter as the appeal fails on the ground of interpretation and application of Notification No. 120/75-CE.,dated 30-4-1975.