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2022 (12) TMI 48 - CESTAT NEW DELHIValuation of manufactured material liquid Carobon dioxide (CO2) - inclusion of freight charges for delivery at buyer’s place in the transaction value - freight charges recovered by the appellant manufacturer from the purchasers of manufactured product / liquid CO2 for transporting the said product in its own specialized tankers to the buyers premises - Scope of place of removal - HELD THAT:- From the definition of “place of removal” also it is seen that where the price at which goods are ordinarily sold by the assessee is different for different places of removal, then each such price shall be deemed to be the normal value thereof. Subclause (b)(iii) is very important and makes it clear that a depot, the premises of a consignment agent, or any other place or premises from where the excisable goods are to be sold after their clearance from the factory are all places of removal. What is important to note is that each of these premises is referable only to the manufacturer and not to the buyer of excisable goods. Hon’ble Apex Court in the case of UNION OF INDIA & ORS. ETC., ETC. VERSUS BOMBAY TYRE INTERNATIONAL LTD. ETC., ETC. [1983 (10) TMI 51 - SUPREME COURT] held that cost of transportation from ‘place of removal’ to the ‘place of delivery’ is statutorily excluded. The harmonious reading of three of above provisions (Section 4 of Central Excise Act, Rule 5 of Valuation Rules and definition of place of removal under section 4 of Central Excise Act, 1944) makes it clear that buyer’s premises can never be, by any law, can be called as the place of removal of excisable goods. The place of removal can never be equated with the place of delivery. Place of removal alone is relevant for the purpose of section 4 i.e. for the purpose of calculating the transaction value as it was held by Hon’ble Apex Court in the case of ESCORTS JCB LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-II [2002 (10) TMI 96 - SUPREME COURT]. Undisputed fact remains is that appellants are mentioning the freight charges as separately in the invoices issued by them to the purchasers, there is nothing in the invoices or any other documents which shows that sales are on FOR destination basis, though the authorities below have given the finding that sales were on FOR destination basis but no evidence in this regard has been discussed - the cost of transportation in the given circumstances is the one which has expressly been excluded in terms of Rule 5 of Valuation Rules. The freight charges are not includible in the assessable value of liquid CO2 those being separately charged in the invoices and the gas was sold at the time of clearance from the factory of the appellant. The authorities below are held to have wrongly confirmed the duty demand against the appellant on the basis of inclusion of freight charges in assessable value. Appeal allowed.
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