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TMI Blog2017 (10) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... Bulk of the goods were sold to M/s. ACME Telepower against the purchase orders placed by them. The Central Excise duty was paid on the purchase price mentioned in the invoices. Department noticed that in addition, the appellant received freight charges from the customer. As per the condition in the purchase order, the appellants are required to bear unlimited liability for the goods against any loss or damage upto the buyers premises. Department was of the view that the goods have been sold to the customers at the buyers premises and hence the freight charges collected by the appellant are required to be added to the transaction value for payment of Central Excise duty. Accordingly, the department issued show cause notice and confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall - (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. Section 4(3)(c)(iii) of the Central Excise Act, 1944 reads as under: (c) "place of removal" means - (iii) a depot, premises of a consignment agent or any other place or premises from w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods have been sold in terms of section 4(1)(a) except that the excisable goods are to be delivered at the buyers premises. Rule 5 makes it clear that the cost of transportation from the factory gate upto the place of delivery is to be excluded computing the assessable value. In this view of the case, we do not find any justification for including the freight charges in the assessable value for the purpose of excise duty. 7. We are of the view that explanation 2 to Rule 5 will not be applicable in the facts of the present case since, the place of removal is factory gate and not the premises of buyer of goods. 8. In view of the above discussion, the impugned order is set aside and appeal is allowed. (Pronounced in the open Court on 05.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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