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2014 (4) TMI 336 - CESTAT NEW DELHIValuation - area based exemption - allegation of payment of duty on higher value - Exemption under notification no.56/2002-CE dated 14.11.2002 - Whether the appellant were required to pay duty on the FOR price which would include the element of freight from the factory gate to the customer’s premises, or the appellant were required to pay duty on the value of the goods at the factory gate i.e. FOR price minus freight charges from the factory gate to the customer’s premises - Held that:- The show cause notice while mentioning in para-6 that the sales of the appellant are on FOR basis, still invokes Rule 5 of the Central Excise Valuation Rules, 2000 for excluding the element of freight from the factory gate to the customer’s premises from the assessable value and on this basis alleges that the appellant in order to avail higher quantum of exemption have deliberately paid duty on the higher value. Stand taken by the department is contradictory, as once the department accepts that appellant’s sales are on FOR basis, the sales would take place at the customer’s premises and in such a situation, in accordance with the provisions of Section 4(3)(c) of the Central Excise Act, 1944, it is the customer’s premises, which would be the ’place of removal’ and accordingly, the assessable value of the goods would include all the expenses incurred upto the customer’s premises including the freight charges. Rule 5 of the Central Excise Valuation Rules, which provides of exclusion of freight from the place of removal to place of delivery, has no application to this case and as such, has been wrongly invoked. The appellant, therefore, have correctly paid the duty on the FOR price and have correctly availed the exemption - Decided in favour of assessee.
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