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2019 (10) TMI 5 - AT - Central ExciseValuation - freight/transportation charges - relevant Place of Removal - in cases where the goods are sold on FOR basis whether the place of removal shifts to the buyer’s premises or it will continue to be at the seller’s premises? HELD THAT:- The assessable value of goods under section 4 must include the costs of transportation and transit insurance if the place of removal shifts to the buyer’s premises. Also, the assessee will be eligible for Cenvat credit of the costs of the transport incurred in transporting the goods from their premises to the buyer’s premises - On the other hand, if the place of removal continues to be the seller’s premises then the value cannot include the cost of transportation and transit insurance incurred for transporting the goods from the seller’s premises (factory, depot, place of consignment, etc.) to the buyer’s premises. Conversely, the assessee will also not be entitled to Cenvat credit of the transport of goods from their factory to the buyer’s premises. Both valuation under Section 4 and eligibility of Cenvat credit under CCR, 2004 depend on this key question. In the case of COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [2015 (4) TMI 857 - SUPREME COURT] the Hon’ble Apex Court had held that since the sale takes place when the ownership shifts to the buyer, where the sale is on FOR basis, the place of removal shifts to the buyer’s premises - In the subsequent judgment of the Hon’ble Apex Court in the case of COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. [2015 (10) TMI 613 - SUPREME COURT] categorically held that the buyer’s premises can never be the place of removal because the expression is the place from where the goods have to be sold and not from where the goods have been sold. Secondly, it has been held that once the goods reach the buyer’s premises, there is no question of removal thereafter as they have already reached the destination. Thirdly, it was being held that the places indicated in the clause such as depot, consignment agent etc., are all places which belong to the seller and not to the buyer. Therefore, the place of removal has to be seller’s premises and cannot be buyer’s premises. This definition of “place of removal” in both Section 4 and Cenvat Credit Rules does not change depending upon any facts or circumstances of the case. Whether the sale is on FOR buyer’s premises basis or otherwise, the judgment of the Hon’ble Apex Court in the case of Ispat Industries Ltd (supra) applies. The demand of differential duty in this case which is based on premise that the place of removal shifts to the buyer’s premises in case of FOR basis does not sustain - appeal dismissed - decided against Revenue.
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