2011 (8) TMI 856 - AT - Central Excise

Assessable Value - Freight from factory gate to place of removal - Held That - In view of CCE NOIDA vs. Accurate Meters Ltd. (2009 - TMI - 32539 - SUPREME COURT) freight and insurance charges for delivery to the customers premises are not includable and the amount claimed by way of transportation and insurance charges cannot be considered for determining the value of the goods supplied. Appeal or revenue dismissed.

Summary

Issues:
- Whether freight and transit insurance charges incurred by the respondents are required to be added in the assessable value for Central Excise duty calculation.

Analysis:
The appeal filed by the Revenue was against the order-in-original dated 30.04.2003. The case involved M/s. Finolex Cables Ltd., manufacturers of light duty cables. The respondents claimed deductions towards discounts, freight, and transit insurance on the basic price for direct sales and sales through branches/depots. The Revenue issued a show-cause notice demanding duty for the period from 28.09.1996 to 31.01.2001, stating that charges for transportation and transit insurance recovered by the respondents from customers were not eligible for deduction from the assessable value. The Commissioner initially dropped the proceedings, but the department appealed to the Tribunal.

The Revenue argued that the Commissioner relied solely on a Supreme Court judgment applicable to a different period, and the charges for transportation and insurance were part of the sale value of goods. However, the Tribunal noted previous decisions in similar cases, such as Associated Strips Ltd. vs. CCE and CCE NOIDA vs. Accurate Meters Ltd., where it was held that such charges are not includable in the assessable value. The Tribunal referred to its own order in the appellant's case, where the issue was decided in their favor. Based on these precedents, the Tribunal dismissed the Revenue's appeal and disposed of the Cross Objection filed by the respondents.

In conclusion, the Tribunal upheld that the transportation and insurance charges incurred by the respondents from the factory gate to the place of removal are not required to be added in the assessable value for Central Excise duty calculation. The decision was based on established legal precedents and the specific circumstances of the case, leading to the dismissal of the Revenue's appeal and the disposal of the Cross Objection.