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Sterlite Optical Technologies Ltd. Versus Commissioner of Central Excise & Customs Aurangabad

2015 (9) TMI 1023 - CESTAT MUMBAI

Valuation of goods – Deduction of freight from the assessable value - Held that:- freight shown in the invoices in addition to basic price of the goods. It is clear from the terms of the bid documents also that basic price and other components have to be indicated separately. Therefore, there is no dispute that basic price and the freight components are clearly indicated separately in the invoices and therefore criterion i.e. cost of transportation should be in addition to the basic price of the .....

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-WZB/EB - Dated:- 1-5-2015 - P. K. Jain, Member (Technical) And Hon ble Mr Ramesh Nair, Member(Judicial), JJ. For the Appellants : Shri. Vishal Agrawal, Advocate For the Respondent : Shri. Ashutosh Nath, Asst. Commissioner(A.R.) ORDER Per : Ramesh Nair This appeal is directed against Order-in-Appeal No. BPS(220)16/2004dtd. 10/6/2004 passed by the Commissioner of Central Excise & Customs(Appeals), Aurangabad wherein Ld. Commissioner(Appeals) upheld the order-in-original dated 28/9/2001 and re .....

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ight was proposed to be denied and consequently demand of duty of ₹ 29,29,426/- for the period from 7/2000 to 1/2001 was issued. In the show cause notice it was contended that the deduction on account of freight is allowed only if the assessee showed freight separately in the invoices and only in the actual cost charged from the buyers. If the assesse had a system of pricing and sale at uniform prices inclusive of equated freight for delivery at the factory gate or otherwise no deduction o .....

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try of Communication Department of Telecommunication Service. The price for supply is composite price but as per the condition, while supply the goods in the sale invoice, the appellant required to indicate basic price and other components of the price individually. He submits that as per their system of clearance of the goods they have shown bifurcation of composite price in the sale invoices issued to the department of telecommunication wherein actual amount of freight sales tax, excise duty w .....

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some sample invoices from which he pointed out that the freight charges in the sale invoices is actual freight and not equated freight. Since entire case has been proceeded on the assumption that the freight charges by the appellant is equated and not the actual freight, he submits that authorities have proceed on the wrong assumption. He submits that the appellant right from the adjudication stage have been submitting freight charges as actual freight which was not given any heed, hence, whole .....

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concept only statutory provision was made for deduction of transportation charges from the assessable value of the goods for the purpose of charging excise duty. Without prejudice he also submits that in view of the various judgments even if it is presumed that the freight in the present case is equated freight though not admitted, the deduction of said freight is also allowable. He placed reliance on the following judgments: (a) Goodyear India Ltd. Vs. Commissioner of C. Ex. Delhi-IV [2014(301 .....

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ions on the appellant to ensure the quality testing at the place of delivery with this fact sale of the goods is taken place at the place of delivery and not at the place of removal therefore deduction of transportation is not allowable. In this support, he placed reliance on following judgment: (a) Hard Castle Petrofer Pvt. Ltd. Vs. Commissioner of C. Ex. Jammu(J&K)[2014(304) ELT 576 (Tri- Del.)] (b) Commissioner of C. Ex. Chandigarh Vs. Punjab Tractor Ltd. [2010(259) ELT 123(Tri. Del.)] He .....

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gh the factual matrix, on perusal of Bid documents particularly para 9 thereof which is reproduced below: 9.1 The bidder shall give the total composite price inclusive of all levies & taxes, packing forwarding, freight and insurance etc. The basic unit price and all other components of the price need to be individually indicated against the goods it proposes to supply under the contract as per price schedule given in Section VII. Prices of incidental services should also be quoted. The offer .....

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le of requirement. 9.3 The prices quoted by the bidder shall remain fixed during the entire period of contract and shall not be subject to variation on any account. A bid submitted with an adjustable price quotation will be treated as non-responsive and rejected. 9.4 The unit prices quoted by the bidder shall be in sufficient detail to enable the purchaser to arrive at prices of equipment/system offered. 9.5 DISCOUNT, if any, offered by the bidders shall not be considered unless they are special .....

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per clause 9.2(i) is for the information of the purchaser and any change in these shall have no effect on price during the schedule period of delivery. 9.7. The freight by sea for transportation of equipments/Stores from the nearest port in the main land to Andaman & Nicobar Islands will be reimbursement to the supplier a the concessional rates levied by Ministry of Water and Surface Transport on production of proof. 9.8 The prices will be quoted at Copper wire prices of ₹ 1,21,000 per .....

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dition in the said terms that all these elements shall be quoted separately, item wise. Since component like freight, service tax, insurance varies from destination to destination, basic price does not remain uniform and it keeps on changing depending upon the different quantum of these components. It is also observed that condition of the bid that the testing of the product shall be carried at the place of delivery even if it is so that alone can not be deciding factor, that the goods sold at p .....

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goods are sold at the consumer s place. When the terms of the bid as mentioned above, as regard fact of place of sale, it is clear that sale of the goods has taken place at the time of removal of the goods from the appellant s factory and therefore it is factory gate sale hence the deduction on account of transportation must be allowed. The deduction of transport from the value of the goods is mandatory under Rule 5 of Central Excise Valuation (determination of price of excisable goods) Rules, 2 .....

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ost of transportation includes - (i) the actual cost of transportation; and (ii) in case where freight is averaged, the cost of transportation calculated in accordance with generally accepted principles of costing. Explanation 2. - For removal of doubts, it is clarified that the cost of transportation from the factory to the place of removal, where the factory is not the place of removal, shall not be excluded for the purposes of determining the value of the excisable goods.] From the above rule .....

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