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2014 (7) TMI 351 - AT - Central ExciseValuation of goods - Inclusion of freight charges - Held that:- Appellant are mentioning the freight amount separately in the invoices issued by them to their customers. From the facts narrated in the Show Cause Notice and in the Order-in-Original as well as in Order-in-Appeal, it is seen that what the Department seeks to include in the assessable value of the gases sold by them, is the differential freight i.e. difference between the amount charged by the appellant from their customers during 2005-2006 to 2009-2010 period as freight and the actual expense incurred on running of the tankers for delivery of gases to the customers. However, the differential freight would be includible only if the freight from the factory gate to the customers premise is includible in the assessable value and this can be done only if sales are on FOR destination basis in the sense that during transit, the risk of the loss of goods or damage to the goods is of the seller- manufacturer and the ownership of the goods during transit is of the manufacturer and freight is integral part of the value of the goods. It is not the case of Department that the invoices themselves mention the sales as FOR sales or that the supply orders placed by the customers mention the supply of gases on FOR basis. In fact, the invoices show the freight charges separately. In view of these circumstances, just because the customer wanted the appellant to supply the gases at their premises, it would not be correct to presume that sales were on FOR basis. There is also no allegation that the part of value of the goods was being recovered as freight charges by under declaring the value of the goods and inflating the freight charges. In the circumstance of the case running of the tankers for supply of gases has to be treated as an independent activity and therefore the differential freight would not be includible in the assessable value - Decided in favour of assessee.
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