2023 (2) TMI 180 - AT - Central Excise

Short paid Central excise duty (Valuation) - non-inclusion of value of freight charged by the appellant for delivering the cement to their buyers premises - error in calculation or not - clearance of cement dispatched on ‘Free on Road (FOR) basis’ to their customers - place of removal - the place of delivery was the place of removal that Department alleged that the appellant has short paid central excise duty as it has not included the freight charges in assessable values - contravention of the provisions of Section 4 of the Central Excise Act, 1944 read with Rule 5 and 7 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and the Rule 4, 6, 8, 11 and 12 of the Central Excise Rules 2002.

HELD THAT:- Learned DR has laid emphasis upon clause 3 of the definition of place of removal as was relevant for the period in question because said clause includes the place from where the goods are to be sold in the definition of ‘place of removal’, the buyer’s place becomes the place of removal where sale gets concluded at buyer’s place. The said submission is not acceptable in the light of decision of Hon’ble Apex Court in Ispat Industries Ltd., [[2015 (10) TMI 613 - SUPREME COURT]] only wherein the Hon’ble Apex Court has held that the words used in the provision are “goods are to be sold”. The contention of the Revenue would be correct if and only if the words in the provision would have been “goods have been sold”.

The earlier decision in the case of Escorts JCB Ltd., Vs CCE [2002 (10) TMI 96 - SUPREME COURT] was held to have similar facts as were there in the case of Ispat Industries Ltd. The Hon’ble Court also observed that in the case of Commissioner of Customs & Excise, Aurangabad Vs Roofit Industries Ltd., [2015 (4) TMI 857 - SUPREME COURT] the Hon’ble Supreme Court had distinguished Escort’s JCB’s case. But based on the facts of that case (Roofit’s), it was held that the sale of goods in terms of Section 19 of sale of goods Act did not take place at the factory gate of assessee. The Court also observed that the Court’s attention was not drawn to Section 4 of Excise Act as originally enacted and as amended to demonstrate that the buyer’s premises cannot, in law, be “a place of removal” under the said section. Hence, the reliance of Department on the decision of Roofit Industries Ltd., is also no more sustainable.

The value of freight charged by the appellant for delivering the cement to their buyers premises is not to be included while assessing the value for the purpose of payment of central excise duty. Appellant has rightly excluded the same - The differential duty confirmed by the order under challenge is therefore wrong.

Appeal allowed.