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TMI Blog2023 (2) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are the manufacturers of cements and clinkers. They were also availing the facility of CENVAT Credit scheme for the purpose of payment of central excise duty on their finished goods during the period from April 2016 to June 2017. 2.1 Department observed that appellant had paid excise duty on the value, exclusive of freight which was incurred by the appellant for delivery of goods at the premises of some of their consumers. It was observed by the Department that the sale of cement to few of the customers was on FOR basis that too in terms of an agreement/ the purchase order. From the conditions therein, department concluded that it was the buyer's place which was the place of removal. Hence, alleging that the appellant had short paid the excise duty, the show cause notice dated 01.05.2018 was issued to the appellant proposing additional demand of Rs.42,44,685/- on account of non-inclusion of freight in the assessable value during the aforementioned relevant period. The said demand was confirmed initially by the Original Authority vide No. 09/2020-21 dated 31.12.2020. The appeal thereto has been dismissed vide the order under challenge. 3. We have heard Shri R. Muralidhar, Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the expenses incurred by the assessee upto the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted. But the assessee will be entitled to a deduction on account of the cost of transportation of the excisable article from the factory gate to the other places where it is sold. The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place of delivery." 7.1 The Apex Court further observed that Section 4 of the Act in the year 1996 brought about three important changes. The Court observed as follows: "Place of removal" has been defined for the first time to mean not only the premises of production or manufacture of excisable goods but also a warehouse or any other place or premises wherein such goods have been permitted to be deposited without payment of duty and from where such goods are ultimately removed. Interestingly, in Section 4 (2), which is introduced for the first time, where in relation to excisable goods the price thereof for delivery at a pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds Act did not take place at the factory gate of assessee. The Court also observed that the Court's attention was not drawn to Section 4 of Excise Act as originally enacted and as amended to demonstrate that the buyer's premises cannot, in law, be "a place of removal" under the said section. Hence, the reliance of Department on the decision of Roofit Industries Ltd., (supra) is also no more sustainable. 10. This Tribunal also while deciding the same issue on same set of facts and circumstances vide Final Order No. A/30124- 30127/2022 dated 28.11.2022 in Appeal titled as My Home Industries Pvt. Ltd. vs. Commissioner of Central Tax, Visakhapatnam has relied upon the said decision of Hon'ble Apex Court in the case of Ispat Industries (supra) and has held: "10. The place of removal is the factory gate of the appellant as per the appellant, and it is the premises of the Customers, where the delivery of goods have been made, as per the Revenue. That E/30031 & 30032 & 30164/2019 & E/30214/2020 8 the Board had issued a clarification by its clarificatory Circular dated 8.6.2018 referring to its earlier Circular(s) with respect to the subject 'place of removal' under section 4 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would then possibly have reference to the buyer's premises." 11. The Circular further provides in para 4, that the principle laid down in Ispat Industries Ltd. would apply to all situations except where the contract for sale is FOR contract, in the circumstances identical to the judgment in the case of CCE, Mumbai-III v. Emco Ltd. (supra) and CCE v. M/s. Roofit Industries Ltd. (supra). That is, where the ownership, risk in transit, remained with the seller till goods are accepted by buyer on delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal. The said circular further provides that the guidelines and the judgment of Apex Court may be referred to and based on facts and circumstances of each case. Further provides past cases should be accordingly decided. 13. The Hon'ble Supreme Court further observed in the case of Ispat Industries Ltd. in para 23, that "Rule 5 as substituted in 2003 also confirms the position that the cost of transportation from the place of removal to the place of delivery is to be excluded, save and except in a case where the factory is not the place of removal." Further, the place of removal has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellers premises (factory gate, warehouse, depot, consignees premises). It is nowhere stated that the buyer's premises can be E/30031 & 30032 & 30164/2019 & E/30214/2020 14 place of removal. Hon'ble Apex Court also observed that in the Roofit case, it did not have occasion to examine the provisions of Section 4, since it was enacted and amended from time to time in the Central Excise Act r/w the Valuation Rules. After examining Section 4 r/w the rules, the Apex Court observed that the cost of transportation from the place of removal up to the place of delivery of excisable goods is excluded from 'Assessable value' for the computation of excise duty.' 11. We have no reason to differ from the aforesaid decisions, the discussion therein and the conclusion arrived therein. Following the said 'ratio decidendi', we hold that the value of freight charged by the appellant for delivering the cement to their buyers' premises is not to be included while assessing the value for the purpose of payment of central excise duty. Appellant has rightly excluded the same. The differential duty confirmed by the order under challenge is therefore wrong. The impugned order accordingly, is hereby set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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