1999 (6) TMI 375 - AT - Central Excise

Summary

Issues:
1. Whether excess amount collected as freight and insurance is to be added in the assessable value under Section 4 of the Act.

Analysis:
The judgment before the Appellate Tribunal CEGAT, New Delhi involved the question of whether the excess amount collected as freight and insurance should be included in the assessable value under Section 4 of the Act. The Asst. Collector disallowed deductions under Section 4 towards equalised freight and insurance, citing that since the goods were exported under bond with no duty levied, such deductions were not permissible. The Collector (Appeals) found the adjudicating authority's order to be illegal and improper, noting that the party had submitted all necessary details to support their claim. He emphasized that if goods are exported under bond, no duty should be levied. The Tribunal considered previous decisions and circulars, highlighting that excise duty is imposed on the manufacturer, not on profits made by a dealer on transportation. The Tribunal ruled in favor of the respondent, dismissing the appeal filed by the department as the excess freight was not proven to be part of the value of the goods.

The crucial issue revolved around whether the department was justified in adding excess freight and insurance charges to the assessable value based on the difference between the amount collected by the party and the actual transport and insurance costs incurred. The respondent's Counsel referenced various decisions and a circular clarifying the relevant assessable value under Section 4 of the Act. It was emphasized that the duty of excise is imposed on the manufacturer, and there was no evidence presented by the department to demonstrate that the excess freight constituted part of the goods' value. As the Tribunal had previously addressed similar cases and considering the settled position on excise duty, the Tribunal upheld the respondent's contentions and dismissed the department's appeal.

In conclusion, the Appellate Tribunal CEGAT, New Delhi ruled that the excess amount collected as freight and insurance should not be added to the assessable value under Section 4 of the Act. The decision was based on the understanding that excise duty is levied on the manufacturer, not on transportation profits. The Tribunal found no evidence to support the department's claim that the excess freight was part of the goods' value, ultimately dismissing the department's appeal in favor of the respondent.