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2025 (3) TMI 1484

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....Commissioner (Appeals) has in the impugned order, after going through the defence submissions as well as various case laws and circulars relevant to the issue, came to the conclusion that the place of removal under the provisions of section 4 of the Central Excise Act, 1944, in the instant case, would be the buyer's site and therefore, the appellant is required to pay excise duty on assessable value inclusive of freight charges as applicable up to the buyer's premises. Commissioner (Appeals) has gone throught the statutory provisions under section 4 of the Act, as also in terms of section 19 of Sale of Goods Act, 1930 and the facts of the case to decide as to what would be the place of removal. In order to do so, he has examined the purchase orders from which it was observed that there is requirement of supply of goods at customer's site with the responsibility of such goods resting on the supplier till their receipt in good condition at the customer's destination. He has gone through various conditions stipulated in the purchase orders as detailed in Para 7 of the impugned order to come to the conclusion that goods have been appropriated to the contract only at the stage of delive....

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....r affirmed in Vijay Electricals Ltd Vs CCE, C & ST, Hyderabad-I [2020 (7) TMI 318 - CESTAT Hyderabad]. Learned Advocate is also relying on the judgments in the case of Parasakti Cement Industries Ltd Vs CCE, Guntur [2020 (3) TMI 1430 - CESTAT Hyderabad], CCE, Allahabad Vs M/s Sarthek Enterprises Ltd [2016 (8) TMI 443 - CESTAT Allahabad] and also in the case of M/s GP Petroleums Ltd Vs CCE & ST, Gujarat [2019-TIOL-1664-CESTAT-Ahm], wherein, inter alia, it was held that even if the goods are cleared from the factory for sale on FOR basis, the place of buyer cannot be the place of removal and clearly interpreted that the factory gate will become the place of removal. Learned Advocate is also relying on certain definitions including that of 'sale' under section 2(h) of the Central Excise Act, where 'sale' means any transfer of the possession of goods by one person to another in the ordinary course of trade or business and it is not necessary to transfer the risk or ownership and therefore, bearing of risk on behalf of the buyer does not indicate that seller has retained ownership. The possession in goods is passed when the assessee hands over goods to the transporter of goods. 5. Furt....

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.... purchase order copies furnished by the appellant and has observed that it is nowhere mentioned that the price specified is ex-factory price. As an example, he has perused Purchase Order Nos. 3200025874, 3200025884 & 3200022309-1 placed by NDPL, where at Sl. No. 1, it was mentioned that after installation, testing and commissioning of RMU, test reports shall be submitted to the site in-charge along with the bills and as per the general conditions of contract, the payment terms specify that 90% payment shall be made within one month of receipt of bills and the remaining 10% shall be released on complete installation, testing and commissioning. It was also noted that the appellants were charging separately for transportation and delivery of goods in good condition and therefore, it was considered that the ownership of goods remained with the appellant till the goods reach the buyer's premises. We have perused various terms and conditions as detailed in the OIO at para 17.2. We note that the terms and conditions of the sale, which also specifies scope of work, includes (a) supply of such items required for due performance of the entire contract to NDPL's satisfaction, (b) unloading at....

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....ies (supra), it was held that wherever the clearance of goods is against FOR contract basis, the authority needs to ascertain the place of removal by applying the judgment of Hon'ble Supreme Court in the case of Roofit Industries (supra) and Emco Ltd (supra). In the case of M/s HD Wires Pvt Ltd Vs CCGST & CE, Indore [Final Order No. 57985/2024 dt. 08.08.2024], the Coordinate Bench at Delhi, inter alia, examined the applicability of judgment of Roofit Industries and Emco Ltd (supra) in a similar factual matrix where the appellant had not included the freight charges in the transaction value. The Tribunal also relied on the judgment of Hon'ble Supreme Court in the case of CCE & ST Vs Ultra Tech Cement [2018 (9) GSTL 337 (SC)], to come to the conclusion that in the given set of facts, point of sale was where the ownership of goods was transferred to the buyer or customer and therefore, all the expenses incurred and collected till the buyer's premises shall be part of the assessable value. 11. We find that both in the OIO as well as in the impugned order, based on the factual matrix, it has been brought out that the contract was on FOR basis, as thus the factual matrix was more clearl....