TMI Blog2017 (11) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... en the seller cannot claim deduction of freight and insurance from sale price - also, in the balance sheet for 2011-2012, the freight outward is shown under selling and distribution expenses. Hence, the freight outward is includible in the sale value. Appeal allowed - decided in favor of appellant. - Appeal No. E/157592/2013 - Final Order No. 62030/2017 - Dated:- 31-10-2017 - Mr.Ashok Jindal, Member (Judicial) And Mr.Devender Singh, Member (Technical) For the Appellant: Shri Manish Gaur, Advocate For the Respondent : Shri G.M.Sharma, AR ORDER Per : Devender Singh The brief facts of the case are that M/s.Kangaroo Industries Limited, IGC, Phase-II, SIDC), Samba, J K applied for fixing of special rate under Notification No.1/2010-CE dared 6.2.2010. The appellant is engaged in the manufacture of staple strips falling under Chapter 83 of the Central Excise Tariff. As per Sl.No.19 of the Table in para 2 of the said notification, the value addition has been fixed at 36% for the above mentioned goods. Notification provides for fixation of special rate of value addition under certain situations. During the examination of the claim of the appellant for fixing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Government is excludible from the transaction value. He, therefore, argued that for the purpose of fixing the value addition, net amount of duty paid should only be taken into account. He also relied on the following case laws:- (i) CCE vs. Meera Co.2007 (217) ELT 460 (Tri.-Del.) (ii) Dharampual Styapal Limited vs. CCE-2016 (34) ELT 376 (Tri.Kolkata) 5. On the issue No.2, he contended that all the sales made by the appellant are FOR destination sales and in the invoice, freight is shown as paid. Further, in the balance sheet for the year 2011-12, outward freight is shown under the selling and distribution expenses. Besides, transit insurance policy has been taken by the appellant. Hence, all these expenses, are part of the sale price of the appellant and therefore the same cannot be deducted. He relied on the following judgements in this regard:- (i) Hindustan Sugar Mills Ltd. vs. State of Rajasthan-1979 (43) STC 13 (SC) (ii) Indian Meters Ltd. vs. State of Tamil Nadu-[2010] 34 VST 273 (SC) (iii) Indian Oil Corporation Ltd. vs. ACCT-[2015] 82 VST 264 (Raj.) 6. Learned AR reiterated the findings in the order of the adjudicating authority. He relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r; (v) Less : Value of said goods available as inventory in the unit but not cleared, at the end of the financial year preceding that under consideration. Special rate shall be the ratio of actual value addition in the production or manufacture of the said goods to the sale value of the said goods excluding excise duty, Value Added Tax and other indirect taxes, if any, paid on the goods. goods. (emphasis supplied) 9. We find that the procedure of payment of duty through PLA and subsequent refund of the same amount, are merely a mechanism to implement the area based notification. Admittedly, the clearance of the goods is under an exemption notification issued under sub section (1) of Section 5A of Central Excise Act, 1944. If the intent is to ascertain actual value addition, then this artificial mechanism of paying duty and subsequent refund, which is merely a mechanism to implement the exemption notification will required to be kept out of calculation. The Commissioner has clearly fallen into an error when he claims that refund is the exemption notification is an incentive and not value addition. We note that refund is not due to any excess duty paid but an extraordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her Notification No. 27/2001-C.E. is an independent exemption Notification and not an amendment to Notification No. 32/99-C.E. or 33/99-C.E. The provision of Rule 12 of CCR, 2004 is a special dispensation with respect to inputs manufactured in specified areas for the purpose of taking Cenvat credit. The argument taken by the appellant, that these provisions are made as an abundant caution or are clarificatory and has no relevance, is thus required to be rejected. On the contrary the opening phrase of this Rule 12 containing the words Notwithstanding anything contained in these Rules has to be interpreted to mean that in spite of the provisions contained in Rule 3 Rule 6 of the Cenvat Credit Rules, credit of whole of duty paid through PLA will be admissible even if the same stands fully exempted by exemption notifications specified in these Rules. As Notification No. 27/2001-C.E., dated 11-5-2001 is not mentioned, in these Rules, it is held that though area-based exemption is admissible to NCCD but its Cenvat credit has not been made available by a deliberate omission from the provisions of Rule 10 or Rule 12 of the CCR, 2001/2002 or CCR, 2004. 13. In the case of Osaka Alloys ..... X X X X Extracts X X X X X X X X Extracts X X X X
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