TMI Blog2009 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... nd parts thereof falling under Chapter Sub-heading No. 9028.00 and 9033.00 of First Schedule to the Central Excise Tariff Act, 1985. Its customers, inter alia, are various State Electricity Boards constituted and incorporated under the Electricity (Supply) Act, 1948. Indisputably, the State Electricity Boards in terms of advertisements issued in this behalf called for quotation for supply of electric meters. The value of the electric meters was to be fixed as at the factory gate. Freight and the insurance charges, however, as stipulated therein, were to be charged on an average basis and not on actuals. Inter alia on the premise that the manufactured goods were actually delivered to the purchasers at their premises and not at the factory gate, a notice dated 6.2.2003 was issued to the assessee asking it to show cause as to why excise duty amounting to Rs.9,13,260/- not paid on freight and insurance should not be demanded under Section 11A of the Act along with interest as payable under Section 11AB thereof as also as to why the penalty in terms of Rule 25 of Central Excise (No.2) Rules, 2001/Central Excise Rules 2002 should not be imposed upon it. 3. Before the Adjudicating Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reads as under: "4. Valuation of excisable goods for purposes of charging of duty of excise.- (1) Where underthis 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 goods are not related and the price is the sole consideration for the sale, be the transaction value;" "Place of removal" has been defined in Section 4(3)(c) to mean: "(c) "place of removal" means- (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place on premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed;" 8. Indisputably, a place where excisable goods are sold can be a place of removal. The question, therefore, what would constitute a place of removal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of such goods is to be determined as per the provisions of Central Excise Valuation Rules, 2000. Further, as per rule 5 of the Valuation Rules, 2000, where any excisable goods are sold in the circumstances specified in clause (a) of sub section (1) of section 4 of the Act except in 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 be 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. If the assessee has a system, of pricing and sale at uniform prices inclusive of equated freight for delivery at factory gate or elsewhere, no deductions for freight element will be permissible." Despite the same, however, it arrived at a conclusion that the sale had taken place at the end of the buyer on the premise that the legal ownership of the goods would pass to the buyer at the latter's place. 10. Indisputably, the authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the goods. 13. In the case of Associated Strips Ltd. vs. Commissioner of Central Excise, New Delhi reported in [2002 (143) E.L.T. 131], the Tribunal distinguishing its earlier decision in Commissioner vs. Prabhat Zarda Factory Ltd. [2000 (119) E.L.T. 191, held: "18. In the case of Associated Strips Ltd. the goods manufactured are inspected by the representative of the buyer (Electricity Board) and thereafter the manufacturer had to mark the name of the buyer on the poles before they are handed over to the transporter. So also in the case of Mauria Udyog Ltd. the LPG cylinders manufactured by the appellant are inspected by the representatives of the oil companies. After getting test certificate from the Bureau of India Standards Cylinders are to be marked with the name of the oil companies before they are handed over to the transporter for the purpose of transmission to the buyer. In the light of the provisions contained in Section 23, it has to be taken that the goods are unconditionally appropriated to the contract when the above procedure was followed and goods handed over to the carrier thus passing on the property in the goods to the buyer. 19. We may also ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the nature of the goods and the other circumstances of the case. If the seller omits so do, and the goods are lost or damaged in course of transit or whilst in the custody of the wharfinger, the buyer may decline to treat the delivery to the carrier or wharfinger as a delivery to himself, or may hold the seller responsible in damages. (3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit, in circumstances in which it is usual to insure, the seller shall give such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails to do, the goods shall be deemed to be at his risk during such sea transit." The factual matrix involved in this case is squarely applicable to the ratio of the decisions in M/s Associated Strips Ltd. (supra) as also M/s Escorts JCB Ltd. (supra). 15. In that view of the matter and for the reasons stated hereinbefore, we have no doubt in our mind that the authority in appeal as also the Tribunal were correct in their view that the amount claimed by way of transportation charges and insurance cannot be considered for determining the value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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