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TMI Blog2025 (3) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... cided on the basis of cost of transportation and insurance. For the same, the appellant was responsible for engaging the services of transporters for transportation of two wheelers till the premises of the dealers and entered into a Standard Transportation Agreement. The appellant was also responsible for obtaining insurance of two wheelers during transit and for which they availed an Open Marine Policy. The appellant recovered the freight and insurance charges from its dealers and disclosed the charges separately on the sale invoices. The appellant made payment to the transporters and insurers from the amount received from the dealers and retained the balance amount with themselves. The excess freight and insurance charges retained by the appellant were treated as 'profit' for the service. On the basis of the enquiry initiated by the Department, details were sought from the appellant with respect to excess receipts of freight and insurance which were duly submitted. 2. Show cause notice dated 16.12.2016 was issued raising the demand of Rs.16,93,14,862/- on the freight and insurance charges realised from the dealers in excess during the period June 2011 to March 2016. In addition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the charges received were in excess of the amount paid to transporters or logistic suppliers who are actually transporting the goods to buyers premises. 5. Considering the facts of the present case, we find that the appellant is involved in the manufacture of excisable goods, which they are supplying to their dealers at their premises by hiring transporters and insurance agents for which they were paying certain amounts to the transporters from their own account and subsequently, the said amount was collected from their buyers or dealers at certain percentage of price or value of goods which was deposited in the account of the appellant. After making payment to transporter and insurance agency, the appellant had retained the remaining excess amount with them. The said excess amount is not any independent amount for which any separate agreement has been entered into between the parties but is in connection with the sale of the two wheelers and formed part of the transaction value on which the appellant had paid the excise duty. The facility of providing transportation of goods to the buyers premises is an activity related directly to the supply of goods manufactured by the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Manesar unit on the ground that the issue involved in that case was different and hence is not applicable to the present case. The relevant paragraph of the impugned order is quoted below:- "18.21 I have gone through both the Order-in-Original (1) No.18/SA/CCE/ST/2014 dated 07.05.2014 passed by the Commissioiner, Central Excise Commissionerate, Delhi-III, Gurugaon and (2) No.DLI-SVTAX-004-COM-026-16-17 passed by the Commissioner, Service Tax, Delhi-IV, Gurgaon, submitted and marked as Annexure No.25 and 26 respectively by the notice. I find that in both the said cases issue involved was "Non-payment of Service Tax on ' transport of goods by road' service under reserves charge method" among others and both the show cause notices were issued on the basis of an audit objection. However, the issue involved in the instant case is alleged "non-payment service tax amounting to R.16,93,14,862/- on the excess amount/'commission' collected by the notice on account of 'Freight ' and 'Insurance' which is different from the issue involved in their Manesar Unit/said orders-in-original, hence squarely not applicable to the case in hand." 10. We find that the Adjudicating Authority had m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents submitted by the party it is apparent that the noticee has discharged excise duty on additional amounts recovered under the head of Freight and Insurance. The SCN proposes to demand service tax amounting to Rs. 2.23.69.534/- on extra consideration of Rs.18,09,83,288/-.The total of extra consideration of Rs. 18.09.83.288/- plus service tax on the same of Rs.2,23,69,534/- comes to Rs 20,33.12.459. The Noticee has paid excise duty on Rs. 20,33,12,459/- treating the same cum duty price. Also, the noticee had already paid service tax on GTA service on actual transportation charges paid by them in terms of Rule 2(1)(d)(v) of the Service Tax Rules. 1994. Therefore, the additional amount recovered by the noticee on account of transportation and insurance have been included in the assessable value for payment of central excise duty. Further, having paid excise duty on the additional consideration on the value of goods sold on account of transportation and insurance, the question of taxing the same once again will only amount to double taxation on the same amount one under Excise law and one under Finance Act, 1994. in terms of Rule 2(1)(d)(v) of the Service Tax Rules, 1994." 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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