TMI Blog2010 (7) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... over. If after transfer of title to the goods by delivery of the goods, for which he has already collected the price of the goods and after delivery if he receives the transportation charges, then the said amount does not form part of the taxable turnover as it is not a part of the sale consideration or paid prior to sale of the goods. That appears to be a clear manifestation of the intention by the Legislature as contained in various definitions referred to above and the clarifications issued by the Government. In that view of the matter, the order passed by the revisional authority is strictly in accordance with law, whereas the appellate authority was carried away by the legal position prior to the enactment of the Act and thus he got co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort, the Rules ). Even for the subsequent period, the Department declined to grant exemption. The appellant filed a detailed reply objecting to the proposed disallowance of the transportation charges under rule 3(2) of the Rules on the ground that the transportation charge is not part of taxable turnover as the goods were transported to the customers' destination at their request and the bills showed the transportation charges separately and not as a part of the goods sold since the transportation charges were reimbursable to the customers by the appellant. By an order dated October 12, 2007, the first respondent passed an order declining to grant the aforesaid deduction. Aggrieved by the same the assessee preferred the appeal. The app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l authority committed a serious illegality in interfering with the well-considered order passed by the first appellate authority. Per contra, learned counsel for the Revenue submitted that in the scheme of the Act, freight charges are not one of those items which can be taken into consideration in arriving at the taxable turnover. That apart, rule 3(2) does not provide for deduction towards freight charges as was the position earlier and therefore, the Legislature has explicitly made it clear by declining to grant deduction on freight charges and therefore, he submits that the order passed by the revisional authority is correct and in accordance with law and does not call for any interference by this court. In the light of the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction of freight charges. In view of the various provisions in the earlier enactment, which had provided for such deduction, a bona fide doubt did exist in the minds of the dealers. Therefore, they sought for a clarification from the Government. In fact, they wanted an amendment to rule 3 to include freight charges, which are eligible for deduction as the same are post-sale expenditure. It was clarified by a communication dated May 18, 2007. In reply the Government clarified the position as under: (a) If the freight/transportation charges are paid by the seller prior to the delivery of goods and ownership and risk remains with the seller, then such transportation charges are part of the sale consideration and liable to tax. (b) If ..... X X X X Extracts X X X X X X X X Extracts X X X X
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