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M/s Shakti Tubes Limited. Versus CCE, Patna

2017 (7) TMI 556 - CESTAT KOLKATA

Valuation - transportation cost - differential pricing - commission paid to the commission agents - includibility - Revenue felt that premises are place of removal and transportation cost from the factory gate to place of removal should be included in the assessable value - Held that: - the period involved in the show cause notice is from 2002-2003, 2003-2004, 2004-2005, 2005-2006 and 2006-2007. Admittedly, the definition of place of removal in Section 4(3)(c) (iii) was amended w.e.f. 14.05.2003 .....

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lace of removal where factory is not the place of removal (like in the present case where depot is place of removal after 14.05.2003) is to be included in the assessable value - the transportation/freight charges in show cause notice for the period 14.05.2003 to 31.03.2004, 2004-2005, 2005-2006 and 2006-2007 are liable to be included in the assessable value. However, for the period prior to 14.05.2003 when the definition of place of removal in Section 4 of Central Excise Act, 1944 did not includ .....

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agents - extended period of limitation - The appellants have argued that since the issue of depot sale was in the knowledge of the Department, the show cause notice is barred by limitation - Held that: - there is sufficient ingredient available on the part of the Respondent for deliberate withholding the information in suppression of facts with malafide intention to evade Central Excise Duty. Therefore, I find nother wrong in invocation of extended period of limitation in view of deliberate supp .....

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2. Brief facts of the case are that M/s Shakti Tubes are manufacturers of MS Black Pipes and GI Pipes. During the course of Audit, it came to the notice that the appellants are clearing the excisable goods on stock transfer basis to several commission agents appointed by them for sale of the same on consignment basis. They were paying Central Excise Duty on the basis of deemed transaction value at the factory gate but the sale was taking place at the premises of commission agents. The Revenue fe .....

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s dropped by the adjudicating authority. The Revenue went in appeal. In the first appellate proceedings, the Ld. Commissioner (Appeals) held that the transport charges as well as all the costs to maintain such depot/commission agents have to be included in the assessable value. Aggrieved from the said order, the appellant have filed this appeal. 3. Ld. Consultant for the appellant submits that the amount of commission was already included in the value of the goods and hence commission could not .....

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itation and stated that the show cause notice for the period 2002-2003 to 2006-2007 had been issued on 21.02.2008 and the same was barred by limitation. He contended that there was no suppression or intent to evade the duty in the present case as previous show cause notices had also been issued on the same issue and the issue was within the knowledge of the Department. He also contended that the Department did not file any appeal against the Order-in-Appeal No. 88/PAT/C.Excise/Appeal/2004 dt. 12 .....

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e. He stated that after the introduction of new Valuation Rules in July, 2000, the definition did not include the place of removal and hence the show cause notices issued prior to that period are not relevant to show that it was in the knowledge of the Department. 5. Heard the parties and examined the records. 6. There are three issues in the show cause notice:- (i)The inclusion of transportation/freight cost from the factory gate to the depot. (ii)Inclusion on account of differential pricing. ( .....

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ion 4(3)(c) (iii) was amended w.e.f. 14.05.2003 to insert the depot/consignment agents in the statute. As per Section 4(3)(c)(iii), in case of sale from depot/place of consignment agents, time of removal shall be deemed to be the time at which the goods are cleared from the factory. In other words, in case of sale from depot/place of consignment agents, duty is payable on the price prevailing at the depot as on the date of removal from the factory. For proper appreciation of the issue, it is als .....

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rom 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 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, sha .....

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al was reinstated as it obtained from 28-9-1996 to 1-7-2000. Rule 5 as substituted in 2003 also confirms the position that the cost of transportation from the factory to the place of removal is to be included where the factory is not the place of removal. Same view was also taken in Century Laminating Co. Ltd. Vs. CCE, Meerut-II - 2013 (288) ELT 276 (Tri. Del) where the period was October, 1996 to June, 2000 and the Tribunal held as below:- 8. As regards, the Commissioner (Appeals)'s order d .....

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s And Beverages Ltd. Vs. CCE, Jalandhar - 2011 (263) ELT 241 (Tri. Del.), where the period was from September, 1996 to March, 1997 wherein this Tribunal has held as under:- 8.3 As regards the freight expenses for the period prior to 1-3-2003, since the goods were sold from depot, as per the provisions of Rule 7 of the Central Excise (Valuation) Rules, 2000, duty was chargeable on the price of the goods at the deport. Therefore, the freight expenses from the factory gate to depot would be includi .....

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ses from depot to customers premises are included, the price would cease to be the price at the place of removal. Therefore, the freight expenses from the depot to customer's premises would have to be deducted for arriving at the assessable value. However, the evidence with regard to the quantum of freight expenses from depot to customer's premises would have produced by the appellant. In view of above, the transportation/freight charges in show cause notice for the period 14.05.2003 to .....

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12.03.2004, the same pertained to issue of differential value; besides, the adjudication order therein was set aside on ground of limitation. Hence, the same does not help the appellant. Issue No. (ii) On the issue of differential pricing, the Ld. Commissioner (Appeals) has not given any findings. The Ld. Commissioner (Appeals) is therefore required to examine the issue afresh after giving fair opportunity to the appellants to make their submissions. Issue No. (iii). The appellants have contend .....

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y limitation. We find that though there were previous show cause notices pertaining to period from 14.07.1995 to 31.01.1997 on the issue of inclusion of transportation cost and the same were adjudicated and decided in the appeals. However, those show cause notices were under the Valuation provisions as they existed prior to July, 2000. After the introduction of new Valuation provision in Central Excise Act, 1944 in July, 2000, there was a period from 01.07.2000 to 13.05.2003 when there was no ex .....

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gures which was called for by the Superintendent, Central Excise Range, Hajipur: They submitted only those copies of sales notes in which sale value are less than the value declared in their invoices at factory gate. On being requested by the Superintendent, Central Excise Range, Hajipur vide letter C. No.562 dt. 24.07.2007 to submit the copies of all the invoices issued by them (the Respondent) during the month of November, 2005, December, 2005, January, 2005 & May, 2006 along with relevant .....

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ated at Patna, and since they were not cooperating in submitting the required information/book of accounts after several requests/reminder made by the department forced to the Superintendent, Central / Excise Range, Hajipur to issue a summon under Section 14 of the Central Excise Act, 1944 to produce all the required figures on 08.02.2008. I find that in response to the summon dt. 06.02.2008, they submitted some documents and figures on 08.02.2008 and rest documents and figures on 11.02.2008. I .....

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