2023 (11) TMI 1253 - AT - Central Excise

Valuation - non-inclusion of freight charges collected from their buyers in the assessable value - HELD THAT - The issue is squarely covered by the judgment of Hon ble Supreme Court in the case of COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. 2015 (10) TMI 613 - SUPREME COURT wherein it has been held It is clear therefore that on and after 14-5-2003 the position as it obtained from 28-9-1996 to 1-7-2000 has now been reinstated. Rule 5 as substituted in 2003 also confirms the position that the cost of transportation from the place of removal to the place of delivery is to be excluded save and except in a case where the factory is not the place of removal. The impugned order is set aside - appeal allowed.

Summary

Issues involved: Whether freight charges collected by the Appellants should be included in the assessable value.

Summary:
The Appellants were issued a Show Cause Notice regarding the exclusion of freight charges from the assessable value. The demand was confirmed, leading to the appeal before the Tribunal. The Appellant argued that they are entitled to abatement of freight charges as the sales occur at their factory. Citing a Supreme Court judgment, the Advocate emphasized that the issue has been settled and requested the appeal to be allowed. The Authorized Representative reiterated the findings of the lower authority.

After hearing both parties and examining the documents, the Tribunal found that the issue is covered by a Supreme Court judgment regarding the exclusion of transportation cost from the assessable value. The judgment clarified that unless the factory is not the place of removal, the cost of transportation should be excluded. The Tribunal concluded that the sale of goods did not occur at the factory gate of the assessee, as evidenced by various factors such as delivery terms, payment clauses, and issuance of invoices. Consequently, the impugned Order-In-Original was set aside, and the Appeal was allowed with any consequential relief as per law.