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M/s Classic Polytubes Pvt Ltd Versus Commissioner of Central Excise, Lucknow

2016 (3) TMI 800 - CESTAT ALLAHABAD

Assessable value - whether inspection charges with respect to a specific inspection of the buyer is required to be added to the assessable value? - Held that:- As per the definition of 'place of removal' extracted above, given in Section 4 (3) (c) at the relevant time was a factory or any other place or premises or a warehouse wherein the excisable goods have been permitted to be deposited without payment of duty. There is no mention of place of sale of the goods in Section 4 (3) (c) during the .....

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place of delivery is required to be excluded from the transaction value. In the present case the sale is effected at the factory gate which is the place of removal and transportation cost is separately indicated in the invoices - As for the period 1/7/2000 to 31/3/2003, place of removal was only extended to either the factory or a warehouse/premises from where duty was paid. Appeal of the appellant on this account is thus required to be allowed. - On the issue of inclusion of inspection .....

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es cannot be included in the assessable value. In view of the above observations and settled proposition of law, optional inspection charges at the instance of buyer cannot be included in the assessable value under Section 4 of the Central Excise Act, 1944. - Decided in favour of revenue - Excise Appeal Nos. E/1708/2007, E/2018/2007 & E/2106/2007 - Final Order Nos. A/70037-70039/2016 - Dated:- 13-1-2016 - Anil Choudhary, Member (J) And H K Thakur, Member (T) For the Appellant : Ms Shreya Dahiya, .....

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judicate the case and the case should have been remanded back by Commissioner (Appeal) to the Adjudicating authority instead of passing a final order. 3. Ms. Shreya Dahiya (Advocate) appearing on behalf of the appellant argued that the issue involved in the present appeals is regarding inclusion of freight/insurance charges from the factory gate to the buyers premises and inspection charges, at the instance of the buyers, in the assessable value under Section 4 of the Central Excise Act, 1944. R .....

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2015-TIOL-299-SC-CX (ii) Commissioner of Central Excise, Ahmedabad-II Vs. Lubi Submersible Ltd. [2015 (317) ELT 299 (Tri.-Ahmd.)] 3.1 On the issue of freight and insurance from the factory gate to the place of delivery it was argued that the period of demands is from 17/9/2000 to 30/9/2002. That during this period "a depot, premises of consignment agent or any other place or premises from where the excisable goods are to be sold" was not existing as the place of removal as per Section .....

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Excisable goods) Rules, 2000, the cost of transportation to the place of removal is required to be excluded from the transaction value. Learned Advocate relied upon the case law of Apex court in Commissioner of Customs & Commissioner of Customs, Nagpur Vs. M/s. Ispat Industries ltd. - 2015-TIOL-238-SC-CX 3.2 It was also argued on behalf of the appellant that freight and insurance is charged separately in the invoices and the goods are sold at the factory gate which was the place of removal a .....

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buyers. 5. Heard both sides and perused the case records. The first issue involved in these appeals is whether inspection charges with respect to a specific inspection of the buyer is required to be added to the assessable value. The second issue is whether freight and insurance charges paid by the appellant initially and reimbursed later, are required to be added to arrive at the be assessable value under Section 4 of the Central Excise Act, 1944. The demand was initially dropped by the Adjudic .....

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has no merits and is required to be dismissed. 6. Regarding the appeals filed by the appellant M/s. Classic Polytubes Pvt. Ltd., the issues involved is inclusion of inspection charges at the instance of the buyer and freight/insurance charges from the place of removal, in the assessable value under section 4 of the Central Excise Act, 1944. 6.1 The 'place of removal' during the relevant period was defined in Section 4(3) c) of the Central Excise Act, 1944 as follows: " place of rem .....

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ause (a) of sub-section (1) of section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the actual cost of transportation from the place of removal upto the place of delivery of such excisable goods provided the transportation is charged to the buyer in addition to the price for the goods and shown separately in the invo .....

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not where the goods are sold. The words, like ''a depot, premises of consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory" were not existing in Section 4 (3) (6) during the relevant period. Further Rule 5 of the Valuation rules, 2002 also provide that cost of transportation from the place of removal to the place of delivery is required to be excluded from the transaction value. In the present case the s .....

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ods and shown separately in the invoices for such goods. Interestingly, despite the substituted Section 4 not providing for a depot or other premises as a place of removal, Rule 7 deals with the normal transaction value of goods transferred to a depot or other premises which is said to be at or about the same time or the time nearest to the time of removal of goods under assessment. 22. To complete the picture, by an Amendment Act with effect from 14.5.2003, Section 4 was again amended so as to .....

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use (a) of sub-section (1) of Section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the cost of transportation from the place of removal upto the place of delivery of such excisable goods. Explanation 1 - "Cost of transportation "includes- (i) The actual cost of transportation; and (ii) In case where freight .....

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w been reinstated. Rule 5 as substituted in 2003 also confirms the position that the cost of transportation from the place of removal to the place of delivery is to be excluded, save and except in a case where the factory is not the place of removal. 24. It will thus be seen that, in law, it is clear that for the period from 28.9.1996 up to 1.7.2000, the place of removal has reference only to places from which goods are to be sold by the manufacturer, and has no reference to the place of deliver .....

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mstances mentioned in the Section), alone being places of removal. Under no circumstances can the buyer's premises, therefore, be the place of removal for the purpose of Section 4 on the facts of the present case. 6.4 The present appeals are squarely covered by above ratio laid by the Apex Court and for the period 1/7/2000 to 31/3/2003, place of removal was only extended to either the factory or a warehouse/premises from where duty was paid. Appeal of the appellant on this account is thus re .....

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