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2017 (7) TMI 556

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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e depot as place of removal, the place of removal will be factory gate and for this period, the transportation/freight charges would not be includible in the assessable value. - Valuation - differential pricing - Held that: - 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 - matter on remand. - Commission paid to commission .....

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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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be included further. He further stated that the consignment agents after sale of goods retain their commission from the sale proceeds and rest of the amount is remitted to the appellants. Regarding inclusion of transportation cost, ld. Consultant relied upon the Board Circular No.251/85/96-CX dt. 14.10.1996 and stated that duty was required to be paid on the value of the goods prevailing at the time of their clearances from their factory to such consignment agents premises. He also argued on lim .....

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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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o necessary to refer to Rule 5 of Central Excise Valuation Rules, 2000 after it substituted the earlier Rule 5 on 01.03.2003:- Rule 5. Where any excisable goods are sold in the circumstances specified in clause (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 f .....

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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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ble in the assessable value and its deduction cannot be allowed for determining the assessable value. However, the freight expenses from the Depot to customers premises cannot be included in the assessable value of the goods when the goods have been sold from depot, as the assessable value of the goods under Section 4(1) of the Act as it stood during the period of dispute, is the price for delivery of the goods at the time and place of removal and if in case of sale from depot, the freight expen .....

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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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tended place of removal in the statute and in this interregnum this issue was completely nonexistent. Hence, the plea that the issue was in the knowledge of Department is not sustainable. 8. We also find that the Ld. Commissioner (Appeals) has correctly dealt with the issue of invocation of extended period and we agree with his finding of deliberate suppression and misstatement of the facts in the following paragraph from O.I.A:- From records, it is seen that the Respondent did not submit the fi .....

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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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in view of deliberate suppression & misstatement of facts with intention to evade Central Excise duty." In view of the above, finding of deliberate suppression is sustained. 9. In view of the foregoing, (i) the demand in respect of transportation/freight charges for the period 2003-2004 (w.e.f. 14.05.2003), 2004-2005, 2005-2006 and 2006-2007 is upheld along with interest and equivalent penalty. The demand, interest and penalty in respect of transportation/freight charges for the period .....

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