TMI Blog2015 (4) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... order, 100% payment for the supplies was to be made by the purchaser after the receipt and verification of material. Thus, there was no money given earlier by the buyer to the assessee and the consideration was to pass on only after the receipt of the goods which was at the premises of the buyer. From the aforesaid, it would be manifest that the sale of goods did not take place at the factory gate of the assessee but at the place of the buyer on the delivery of the goods in question. The clear intent of the purchase order was to transfer the property in goods to the buyer at the premises of the buyer when the goods are delivered and by virtue of Section 19 of Sale of Goods Act, the property in goods was transferred at that time only - CESTAT did not take into consideration all these aspects and allowed the appeal of the assessee by merely referring to the judgment in the case of Escorts JCB Ltd. [2002 (10) TMI 96 - SUPREME COURT OF INDIA] - Obviously the exact principle laid down in the judgment has not been appreciated by the CESTAT. - Decided in favour of Revenue. - CIVIL APPEAL NO. 5541 OF 2004 - - - Dated:- 23-4-2015 - A.K. Sikri And Rohinton Fali Nariman JJ. For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggrieved by the said order, the respondent filed an appeal before CESTAT. Learned Tribunal vide its impugned judgment and final order dated 30.03.2002 has allowed the appeal on the reasoning that the issue is settled in Escorts JCB Ltd. v. Commissioner of Central Excise, Delhi-II 2002 (146) ELT 31 (SC) = (2003) 1 SCC 281. 5) Feeling aggrieved by the aforesaid order of the CESTAT, present appeal is preferred by the Revenue under Section 35L(b) of the Act. 6) The respondent has been duly served in the appeal. However, nobody has entered appearance on behalf of the respondent. Matter came up for final arguments on 10.04.2015. On that day, we heard learned counsel for the appellant for some time as the argument remained inconclusive. For remaining arguments, matter was adjourned to 13.04.2015. However, nobody appeared on behalf of the respondent on 10.04.2015 and 13.04.2015. In these circumstances, we had no option but to reserve the matter for judgment after hearing Mr. Kaul, learned ASG, who appeared for the Revenue. 7) Insofar as the legal position is concerned, there cannot be any dispute about the same. Section 4 of the Act is the relevant statutory provision which deals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would mean that the expenses which are incurred after the removal of goods from the factory gate namely freight, insurance and unloading charges etc. are not to be included in the valuation of the goods for the purposes of excise duty. The reason is that the sale of goods to the buyer is at the factory gate when the property passes to the buyer and the aforesaid expenditure are thereafter incurred by the buyer. It is this aspect which was gone into by this Court in the case of Escorts JCB Ltd. (supra). That was a case where question of including insurance charges came up for consideration. It was found as a fact that the goods were cleared at the factory gate. On these facts, this Court held that insurance charges, or for that matter, transport charges would not be included even if the assessee had arranged for the transit insurance. The Court found that the terms and conditions of sale clearly stipulated that it was ex-works at the factory gate of the assessee. The payment was to be made before discharge of the goods from the factory premises. In the opinion of the Court, the machinery which was handed over to the career/transporter on receiving the payment was as good as deliver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest of the ownership of the customers in the normal course. To substantiate the point further, a reference to Para 5-012 at Page 184 of Benjamin's Sale of Goods Fourth Edition has been made which is to the following effect: Insurance. The passing of property is rarely of relevance to insurance. A person can insure goods to their full value against any loss on behalf of anyone who may be entitled to an interest in the goods at the time the loss occurs, provided that it appears from the terms of the policy that it was intended to cover their interest. Also a buyer will have an insurable interest in goods if they are at his risk, whether or not the property has passed to him . From the above passage it is clear that ownership in the property may not have any relevance in so far insurance of goods sold during transit is concerned. It would therefore not be lawful to draw an inference of retention of ownership in the property sold by the seller merely by reason of the fact that the seller had insured such goods during transit to buyer. It is not necessary that insurance of the goods and the ownership of the property insured must always go together. It may be dependi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 SCC 507 in the following words: 6. We have heard the parties at length. In our view, Section 4 has to be read as a whole. Under Section 4(1)(a), the normal price is the price at which goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and price is the sole consideration for sale. Therefore, the normal price is the price at the time of delivery and at the place of removal . Before the amendment, the place of removal was only the factory or any other place or premises where the excisable goods were produced or manufactured or a warehouse or any other place or premises where any excisable goods have been permitted to be deposited without payment of duty. Thus, the price would be the price at that place. By the amendment proviso (i-a) to Section 4(1)(a) has been added. Under Section 4(1)(a)(i-a) where the price of the goods is different for different places of removal, each such price was deemed to be the normal price of such goods in relation to such place of removal . Thus, if the place of removal was the factory, then the price would be the normal pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng, transportation, transit risk and unloading charges etc. Even transit damage/breakage on the assessee account which would clearly imply that till the goods reach the destination, ownership in the goods remain with the supplier namely the assessee. As per the 'terms of payment' clause contained in the procurement order, 100% payment for the supplies was to be made by the purchaser after the receipt and verification of material. Thus, there was no money given earlier by the buyer to the assessee and the consideration was to pass on only after the receipt of the goods which was at the premises of the buyer. From the aforesaid, it would be manifest that the sale of goods did not take place at the factory gate of the assessee but at the place of the buyer on the delivery of the goods in question. 14) The clear intent of the aforesaid purchase order was to transfer the property in goods to the buyer at the premises of the buyer when the goods are delivered and by virtue of Section 19 of Sale of Goods Act, the property in goods was transferred at that time only. Section 19 reads as under: 19. Property passed when intended to pass.-(1) Where there is a contract for the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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