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TMI Blog2015 (4) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, freight was paid in full, while in other cases, the appellants were paying freight in part and balance amount of freight was being paid by the customers. In some cases the entire amount of freight paid by the customers. The appellants had taken general insurance policy against damage to the goods being sold by them to various customers during transit and proportionate amount of premium was being charged by them from their customers as transit insurance charge. The general insurance policy taken by the appellant is in their name. 2. In the background of the above facts, the department was of the view that during transit, the appellant were the owners of the goods and in terms of Sale of the Goods Act, ownership of the goods is transferred to the buyers at the buyers/customer s premises only. Accordingly, show cause notice was issued for inclusion of freight and transit insurance in the assessable value and it is on this basis, that differential duty has been demanded by the show cause notice dt.2.11.2001 which is common SCN in respect of three manufacturing units of the appellant factory. The total duty was demanded by the show cause notice is RS.17,64,495/- for the period fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mage to the goods, the same is passed on to the customers, that the Tribunal in the case of Associated Strips Ltd. Vs.CCE, New Delhi-2002 (143) ELT 131 (Tri.-Del.) has held that just because the goods were insured by the manufacturer during transit at the buyer s instance, it cannot be viewed that there is no transfer of title of property to the buyers at the factory gate, and in this regard, in para 23 of its judgement, the Tribunal, in view of the provisions of section 23 and section 39 of Sale Goods Act, 1930, has held that delivery to the carrier has to be taken as delivery to the buyers and accordingly, the Tribunal held that element of freight and transit insurance charges are not to be included in the assessable value; that this judgement of the Tribunal has been approved by the Apex Court in the case of Escort JCB Ltd. Vs. CCE, Delhi-II-2002 (146) ELT 31 (SC) wherein the apex court has held that even where the goods transit insurance was arranged by the assesse, it cannot be inferred that ownership of the goods was retained by the assessee untill it was delivered to the buyers and that in view above submissions, the impugned order is not sustainable. 6. The learned Joint D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of freight was paid by the appellant and balance was paid by the customer and part of the freight paid was recovered from the customer and in some cases the entire freight was paid by the customers. The appellant, in all such cases, have taken general insurance policy against the loss of the goods despatched by them to the customers during the transit and proportionate amount of premium is charged by the appellant from their customers as transit insurance. The department s contention is that since the appellant have taken general insurance policy for the loss of the goods during transit in their name, they have full right to dispose of the goods even after the delivery of the same to the transporter and hence the ownership of the goods is transferred to the customers only at the premises of the customers. It is only on the basis of this allegation, that the department seeks to include freight and transit insurance in the assessable value of the goods. However, on perusal of some of the invoices issued by the appellant which have been placed on record, it is seen that each invoice mentions that though the appellant take every care for packing and forwarding, but they do not ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place from where excisable goods are to be sold after clearance from the factory. Thus, in the case where after removal of the goods from factory, transfer of property in the goods takes place at the customers premises, it is the customer s premises which would be the place of removal and in that case freight and transit insurance upto the customers premises would be includible in the assessable value. 11. The question is as to how to determine as to where the transfer of property in goods has taken place. In our view, for this purpose, what is relevant is at whose risk the goods were despatched from the factory and who is liable for loss of goods or damage to the goods during transit and the sale will be treated FOR sale only when during transit, the seller is liable for loss or damage during transit and freight and transit insurance is part of the value of the goods However, in this case, where the goods were insured by the appellant for loss of goods or damage to the goods during transit and the appellant claimed the compensation in case of loss or damage but passed on the entire compensation amount to the buyers, the Appellant have only arranged transit insurance on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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