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TMI Blog2017 (8) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods were sold at consignment agent/depot, to arrive at assessable value. The period of dispute is from 7/2000 to 2/2003 (i.e., prior to 14.5.2003) and the department was of the view that such freight charges, loading charges has to be included in the assessable value. Show-cause notices were issued raising the above allegation and after due process of law, the original authority confirmed the demand along with interest and imposed penalty under Rule 25 of Central Excise Rules, 2002. In appeal, the Commissioner (Appeals) upheld the same. Hence these appeals. 2. On behalf of the appellant, the Learned Counsel Shri Panchanathan explained the details of the duty involved and the period of dispute in each appeal which is shown in the table below as furnished by the counsel. Appeal No. SCN dated O-in-O O-in-A Period Demand (Rs.) Duty Penalty E/377/2006 1586/2003 dated 30.12.2003 15/2005 dated 28.02.2005 19/2006 dated 30.01.2006 12/2002 to 2/2003 1,70,793 45,00 E/378/2006 554/2002 dated 09.08.2002 13/2005 dated 28.02.2005 17/2006 dated 30.01.2006 7/2001 to 3/2002 8,21,193 2,00,00 E/379/2006 285/2003 dated 24.04.2003 14/2005 dated 28.02.2005 18/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the new Section 4 factory alone was the 'place of removal'. The definition of 'place of removal' was amended later with effect from 14.05.2003 to again include the depot and consignment agent premises as "place of removal". Thus, with effect from 14.05.2003, the definition of place of removal was restored to the situation as it existed prior to 01.07.2000. The present dispute is confined to the period from 01.07.2000 to 28.02.2003 when the "place of removal" was only the factory and not the depot/consignment agent premises. 4. The Learned Counsel contended that as per the definition of place of removal as it stood during the disputed period coupled with the definition of transaction value, introduced with effect from 01.07.2000, the assessable value has to be arrived as provided under Section 4(1)(a) of Central Excise Act, 1944 read with Rule 5 of Central Excise Valuation Rules, 2000 and, therefore, the freight charges has to be excluded. 5. Against this the Learned Authorised Representative Shri A. Cletus, argued that the Board Circular No.354/81/2000 has clarified the issue and that Section 4 (1)(b) r/w Rule 7 has to be adopted to arrive at assessable value and in suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere any excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of section 4 of the Act except the circumstance 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 the transaction value, excluding the actual cost of transportation from the place of removal upto the place of delivery of such excisable goods provided the cost of transportation is charged to the buyer in addition to the price for the goods and shown separately in the invoice for such excisable goods. RULE 7 Where the excisable goods are not sold by assessee at the time and place of removal but are transferred to a depot, premises of a consignment agent or any other place or premises (hereinafter referred to as "such other place") from where the excisable goods are to be sold after their clearance from the place of removal and where the assessee and the buyer of the said goods are not related and the price is the sole consideration for the sale, the value shall be the normal transaction value of such goods sold from such other place at or about the same time and, where such goods are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat while arriving at the transaction value for the purpose of charging, excise duty, the cost of transportation from the factory to the depot or any other place or premises from where the excisable goods are sold have to be included and no abatement in respect of such charges is permitted. In the present case, the goods have been sold and delivered at the ONGC Nhava Depot and on the total value charged, Sales Tax has been collected. In other words, the sales took at the ONGC Nhava Depot. We have perused invoices in respect of supplies made by the appellant at the ONGC Depot and these facts also become very clear from the invoices. Further, in these invoices the total amount charged is indicated and there is no bifurcation as to what is the amount charged for towards the price of the goods, the excise duty element, the cost of transportation, handling, etc. and one lump sum amount is charged which is inclusive of excise duty. The appellant's claim to the contrary is not evident from the invoices raised as there is no mention in these invoices of any charges towards transportation, handling etc. In these circumstances, the contention of the appellant that these are towards trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this case). In my view, Rule 5 is therefore not applicable to the present case. Further, Rule 7 is applicable when the goods are not sold by the assessee at the time and place of removal but are transferred to depot, etc. from where the excisable goods are to be sold. This is precisely the situation in the present case. The appellant has not sold the goods at the time and place of removal but stock transferred to their depot Where the goods were stored and later on sold. In view of the above analysis, in my view, Rule 5 of the Central Excise Valuation Rules, 2000 will not be applicable, but the Rule 7 would applicable. Further, Rule 7 very clearly indicates that the value shall be the normal transaction value of such goods sold from such other place at or about the same time. Thus the transaction value prevailing at the depot will be taken as the transaction value while clearing the goods from the warehouse. In view of the above analysis, I concur with Member (Technical)." 9. The Learned Counsel for appellants, draw support from the judgment of Tribunal reported in appellants' own case reported in 2007 (213) ELT 149 (Tri-Bang.) where the facts are identical. The facts are br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has chosen to take the highest price available on either the previous date or on the day of clearance and calculated the differential value. In some cases, the price at which the goods have been sold on a day subsequent to the date of clearance has also been adopted. It is the submission of the appellants that if the greatest aggregate quantity is determined and differential duty is calculated, it would amount to the same value on which duty has been paid by the appellants. Consequently, there would not be any differential duty payable by the appellants." 10. The Tribunal however, held that from 01.07.2000 excise duty is to be paid on transaction value and, therefore, valuation under Section 4(1)(a) and depot not being place of removal is to be adopted and transportation charges need not be included. The findings of the Tribunal in the appellant's own case is as below:- "5. We have gone through the records of the case carefully. The entire demand arises from three Show Cause Notices. With regard to the first Show Cause Notice, it is seen that it is dated 12-12-2003. The longer period has been invoked, as the period of dispute in respect of the above Show Cause Notice is from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that 'depot' no longer being the place of removal, the transportation charges are not includible. The said judgment referred consider CBEC Circular No.354/81/2000 and held that it is not binding on assessee. The same circular is relied by Commissioner (Appeals) in the impugned order to hold that Section 4(1)(b) with Rule 7 would apply. 12. in the case of Indian Oil Corporation (supra) the majority did not follow the judgment in Ispat Industries Ltd. Instead, they relied on the judgment in the case of Commissioner of Central Excise, Nashik Vs VIP Industries - 2012 (275) ELT 602 (Tri-Mum.), wherein it is held that Rule 7 would apply and transportation charges have to be included. This judgment in the case of Indian Oil Corporation (supra) having been rendered later, we are of the considered opinion that the same is applicable. Following the same we conclude that the transportation charges/unloading charges are includable in the assessable value. The demand of differential duty would therefore sustain on merits. 13. The appellants have argued on the ground of limitation also. From the discussions made above it is abundantly clear that there was much confusion regarding t ..... 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