9911796707
TMI Blog2009 (3) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 Authority, the respondent raised a plea that keeping in view the nature of transaction, freight and insurance charges were not to be included for the purpose of calculation of value of the goods. In support of the said contention, reliance was placed on M/s Escorts JCB Ltd. vs. CCE, Delhi [2002 (146) ELT 31 (SC)]. Distinguishing the said decision, the Adjudicating Authority by an order dated 5.11.2003 opined that there were ample reasons to believe that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 will depend upon the fact of each case. In the demand-cum-show cause notice issued by the Assessing Officer itself, it has been noted: "…In the invoices raised to Government buyers, mainly to Electric Boards, amount of freight and insurance, which is to be recovered from such buyers is shown separately. It is at a fixed rate i.e. equalized freight. It indicates that if the goods are cleared to government buyers, the 'freight and insurance' amounts are borne by the supplier pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in appeal reversed the said decision following the judgment of the CESTAT in the case of the assessee itself, holding: "2. The appellants sell the goods manufactured by them on ex-factory price basis. They also arrange the transport and transit insurance of the goods. Because the goods are insured in the appellants names during transit revenue contends that place of delivery of the goods should be taken as place of removal and Central Excise duty levied on a value including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 refer to the provision contained under Section 39 of the Sale of goods Act which refers to the legal effect of delivery of the goods to a carrier by the seller. It is provided that where, in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, is prima facie deemed to be a delivery of the goods to the buyer AIR 1966 Patna 346, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
