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2016 (6) TMI 575 - AT - Central ExciseValuation - Disallowancwe of deduction for freight - freight indicated was equalised freight and hence not actual transportation charges - Held that:- since the delivery in this case is FOR destination, the case will fall under Section 4(1)(b) and not under Section 4(1)(a). As per Rule 5 of the Valuation Rules, in order to allow the deduction of the cost of transportation following criterion should be fulfilled : (a) The goods should be sold for delivery at a place other than place of removal, (b) Cost of freight should be in addition to the price for the goods, and (c) Cost of transportation should shown separately in the invoices. As regards the first criterion, the place of removal is factory gate, however the goods were delivered at customer place. Therefore goods were sold for delivery not at the place of removal (i.e. factory gate) but at other place i.e. customer door step. From the sample invoices it is seen that the freight shown in the invoices is in addition to basic price of the goods. It is clear from the terms of the bid documents also that basic price and other components have to be indicated separately. Therefore, there is no dispute that basic price and the freight components are clearly indicated separately in the invoices and therefore criterion i.e. cost of transportation should be in addition to the basic price of the goods stand fulfilled. Therefore, we find no valid reason for disallowing the deduction for the freight paid inasmuch as the goods are FOR destination. We also find that a coordinate Bench of CESTAT in the case of Sterlite Optical Technologies Ltd. vs. CCE &C, Aurangabad [2015 (9) TMI 1023 - CESTAT MUMBAI] has taken a view in identical facts that freight will be allowable as a deduction from the composite price. - Decided against the Revenue
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