TMI Blog2017 (3) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... lant and the buyers. Also the sales were complete in terms of sales Tax provisions. In such case when the sale took place at the factory gate and the freight was separately charged as agreed between both the parties, the freight charges would not form part of the assessable value - Further in case where the goods were sold to independent buyers and the freight charges were separately recovered as agreed, the freight element shall not be included in the assessable value and no duty demand can be made from the Appellant. Extended period of limitation - Held that: - there has been no contumacious conduct on the part of the Appellant or no suppression of facts. The issue involved is of interpretation of Rule 8 of Central Excise Valuation Rules and Section 4 of the Central Excise act, also the issue involved has been subject matter of many litigations, the demands made by invoking extended periods are not sustainable. Penalty - Held that: - On the same analogy, as mentioned above, the Appellant is also not liable for penalty under Section 11AC - As regard personal penalty of ₹ 5 Lakhs on Mr. S.W. Parnerkar, employee of the Appellant company we find that he is merely an emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adopted in two situations. In first situation the customer after inspection of the pipes instruct the Appellant to deliver pipe at their premises to facilitate faster delivery and clause to this effect is given in purchase order. The Pipes after inspection by the customers or inspection agency are dispatched to the customer after preparation of invoice. The agreed freight is charged separately and the Appellant are not paying duty on the same. In case of delivery to place outside the state the sale is made against Form - C (Sales Tax Declaration) and in case of transit sale declaration in Form - E is issued to the Appellant. In second situation. in case of composite contracts the Appellant pay duty on value of pipes arrived at under and in accordance with Section 4 (1) (b) r/w rule 8 of Central Excise Valuation Rules. The Appellant is not paying duty on freight paid for transportation. The Revenue demanded duty on freight charges and the demands were upheld by Commissioner and hence these appeals. 3. The Ld. Counsel appearing for the Appellant in case of appeal Nos. E/97/2006, E/228/2010, E/1366/2010, E/171/2011 and E/1020/11 submits that impugned orders are not sustainable. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules would not apply. That the goods are not sold from the factory but are stock transferred to site for construction of pipe line and hence Rule 7 would apply. 5. We have carefully considered the submissions made by both the sides and perused the records. We find that the demand on freight/ transportation charges has been made on goods cleared in following three situations : (i) When the goods were cleared in case of composite contract i.e manufacture and supply of pipes to own pipe laying contracts, the Appellant adopted deduction method i.e reduced value of laying of pipeline and other charges as well as freight charges of transportation of pipes to the site and paid duty on value so arrived. (ii) When the goods were cleared for composite contracts, the Appellant paid duty on value arrived at in terms of Rule 8 of Central Excise Valuation Rules. (iii) When the goods were cleared to independent buyers and the Appellant paid duty on pipes of goods but did not include the agreed freight charges in value of pipes. 5.1 On careful consideration of submissions made by both sides and on perusal of records of the case we find that in case where the Appellant has cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the freight amount was also agreed between the Appellant and the buyers. Also the sales were complete in terms of sales Tax provisions. In such case when the sale took place at the factory gate and the freight was separately charged as agreed between both the parties, the freight charges would not form part of the assessable value. Our view is also based upon the judgments in case of ESCORT JCB LTD. Vs CCE, DELHI - II 2002 (146) ELT 31 (SC), CCE MEERUT II Vs. PRABHAT ZARDA FACTORY 2000 (119) ELT 191 (TRI - LB). 5.4 We do not agree with the contention of the Ld. AR that Rule 7 of Central Excise Valuation Rules would be applicable. The said Rule has applicability only where the goods are cleared from the depot or premises of consignment agent and such value is available. However in the present case since no depot sale or any place from where the goods are sold, the said Rule is not applicable. In such case the valuation under Rule 11 has to be adopted which provides for determination of value using reasonable means consistent with the principles and general provisions of Valuation Rules. In such case the applicability of Rule 8 is in consonance with the given situation. Hen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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