TMI Blog2016 (6) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Shri Rajesh Ostwal, Advocate, for Respondent ORDER PER: RAJU The respondents, M/s Bharat Petroleum Corporation Ltd., are engaged in the manufacture of petroleum products. The respondents were storing the excisable goods at Panewadi Terminal, Manmad District. At the time of clearance from the said terminal, the respondents were collecting ₹ 44/- per KL over and above the assessable value declared as Free Delivery Zone (FDZ) charges. The respondents were also collecting charges @ 0.67/- per KL per Km for delivery of goods beyond the Free Delivery Zone. The Revenue alleged that the amount of ₹ 44/- per KL collected by the respondents for sale within Free Delivery Zone was includible in the assessable value as the said charge was leviable for delivery just outside the factory gate also, where no transportation is involved. On the basis of this, it was argued that the said amount is not related to transportation but is an additional consideration. A show-cause notice demanding duty on this alleged additional consideration was issued to the respondents. The said show-cause notice was dropped by the Commissioner holding that basic prices of MS/HSD are inclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per KL without examining the said figure is correct or otherwise. 3. Learned AR for the Revenue argued that Commissioner has confused between the delivery charges and the freight. He argued that the charges deducted as delivery charges are not freight. The Commissioner (AR) produced a photo copy of a Fax dated 29.9.2000 apparently issued by Oil Coordination Committee, wherein revision in Basic Selling Price of petroleum products from 29.9.2000 was communicated by the OCC. He specially pointed out to following two paras of the said Fax: - At present excise duty on freight in case of MS is being absorbed in the Pool Account effective midnight of 29th/30th September, 2000. Excise duty on freight element included in the price built up of MS should be passed on to consumers. In respect of products where currently 5% duty on assessable value is being absorbed in the Pool Account, the same should be passed on in the settling prices. OCC vide their Fax Message No. 4005 dated July 29, 2000 have advised that the delivery charges within FDZ for MS and HSD are revised to ₹ 44/KL and for ATF to ₹ 46.00/KL. Currently the delivery charges within FDZ included in the RPO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operations being at M/s. Cochin Refineries Ltd. s gate and end at petrol pump only, therefore, freight charges may be includible. We find that it is not disputed that when these products are cleared from the factory gate of M/s. Cochin Refineries Ltd. to appellants designated depot (installation), a clear wholesale level sale is involved (irrespective of the movement being under duty bond), because the title of the goods changes hands from M/s. Cochin Refineries Ltd. to M/s. Bharat Petroleum Corporation Ltd. Therefore, there is no question of logically viewing the movements from M/s. Cochin Refineries Ltd. to the petrol pumps as one ongoing and continuous process. When goods are supplied to outlets by M/s. Bharat Petroleum Corporation Ltd., another sale takes place, which we may for the sake of convenience label as second level wholesale. Now, we find that the law on exclusion of transport charges from beyond the factory gate of excisable goods is a clearly settled one, as can be seen from the following decisions :- 1979 (4) E.L.T. (J 490) (Ker.) 1980 (6) E.L.T. 193 (Bom.) 1980 (6) E.L.T. 220 (Bom.) Learned Additional Solicitor General of India also fairly conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. CCE, Surat - 2005 (191) E.L.T. 641 (Tri.-Mum) (ii) Britco Food Co. Ltd. v. CCE, Pune - 2003 (55) RLT 359 (Tri.-Mum) (iii) Hindustan Petroleum Corpn. Ltd. v. CCE, Mangalore - 2007 (207) E.L.T. 605 (Tri.-Bang.) (iv) CCE, Bhubaneshwar v. Idcol Ferro Chrome Alloys Ltd. - 2007 (217) E.L.T. 373 (Tri.-Kolkata) (v) Rine Engineering Pvt. Ltd. v. CCE, Chandigarh - 2008 (86) RLT 933 (CESTAT-Del.) (vi) CCE, Mumbai v. Cable Corpn. Ltd. - 2008 (85) RLT 759 (CESTAT-Mum.) 21. I find that in the case of Gujarat Guardian Ltd., the amount collected was in respect of freight, in the case of Britco Food Co., the amount collected was in respect of Insurance charges, in the case of Hindustan Petroleum Corpn. Ltd, the amount collected by the appellant was in respect of delivery charges charged by bottling plants for delivery of LPG cylinder up to dealer premises, in the case of Idcol Ferro Chrome Alloys, the amount collected was in respect of transportation charges, and in the case of Rine Engineering Ltd., the issue was collection of freight charges and in the case of Cable Corporation of India Ltd., the issue was freight charges. I would like to mention here in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id by them to Govt. of India or otherwise. 5. We have gone through the rival submissions. We find that while the learned AR has stated that the charges of ₹ 44/KL are not freight charges, the grounds of appeal clearly recognize that the said charge is freight charge. We find that a large number of decisions of the Tribunal had allowed deduction of such charges collected for delivery of goods within the FDZ. We find that the grounds of appeal raise the issue of quantum of amount collected as freight. We find that the appellant had submitted the data before the Commissioner which shows that the amount of freight collected is less than the actual expenditure. We also find that the Tribunal and superior Courts in number of cases held that any amount of freight which is collected in excess of actual freight is not includible in the assessable value. The appellant is particularly relied on the decision of the Tribunal in the case of IOCL - 2013 (291) ELT 449 which specifically deals with the issue. 6. In view of the above, we do not find any merit in the appeal filed by the Revenue. The appeal is therefore rejected. CO disposed off. (Pronounced in Court on 10.6.2016) - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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