2008 (4) TMI 48
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....wo hundred) under Section 11AC and Rs. 20,00 lakhs (Rupees twenty lakhs) under Rule 25 of the Central Excise Rules, 2001-2002 apart from demanding interest. The main allegation against the appellants is that the amount of freight and insurance collected by them in addition to the value of the goods should be included in the assessable value for the purpose of computing duty. The appellants mainly manufactured Electrical Insulators and supplied to different State Electricity Boards under various contracts. 3. It has been argued at length on behalf of the Department that the goods were sold on the basis of FOR Destination and the contracts specified ownership and responsibility for the materials to rest with the appellants till the goods wer....
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....003 issued by the Board. The Department's case entirely depends on the contention that since the goods are transferred at the destination, the sale takes place there and hence, that is the place of removal. Consequently, the transport charges and insurance charges incurred till that point should be added to the assessable value. 5. Shri Ravi Raghavan, learned Advocate for the appellants states that the buyers' premises cannot be the place of removal and in support of his contention, he, inter alia, submits the following :- (a) The impugned goods have been sold as per tenders to State Electricity Boards and the tenderers are also required to separately quote ex-factory price, excise duty, sales tax, freight and insurance, the aggregate of ....
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....8. 7. After hearing both sides and considering their oral and written submissions, we find that such an issue is not coming up before the Tribunal for the first time. The definition of place of removal including depot etc. by the amendment made by the Finance Act, 1996 appears to have given rise to the present demands. We find that the definition also has a qualifier indicating that the place of removal has to be a place from where the goods are removed. The Departmental Authorities seem to have lost sight of this qualifying clause while persisting in their efforts to include transport and insurance charges in the assessable value. In view of this qualifying clause, the place of delivery from which the goods are not further removed cannot ....
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.... transportation from the place of removal to the place of delivery shall be excluded from the value. After amendment of Section 4 in 2000 changing the system of valuation to be based on the transaction value, Rule 5 of the Central Excise (Valuation) Rules, 2000 provides for excluding the cost of transportation from the place of removal to the place of delivery. Such provisions are in line with the constitutional scheme for levy of excise duty on the manufactured goods. Any contrary interpretation of the legal provisions requiring inclusion of the cost of transportation and insurance charges in the assessable value would be ultra vires the constitutional mandate for levy of excise duty. The Excise Authorities cannot interfere in the way the ....