TMI Blog2005 (2) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... the delivery site ex. Daman plant or and on profits made on excess of Transport charges over actuals following Baroda Electric Meters v. CCE - 1997 (94) E.L.T. 13 (S.C.) for the period prior to 1-7-2000 was not discharged. After the amendment to Section 4, for the period 1-7-2000 to 30-6-2001 the appellants submits that on a belief that transaction value would also include the coating charges, they paid duty on value of such coating charges, when Bare Pipes were removed from the "Pipe Mill". Simultaneously CENVAT credit was availed of duty paid on the inputs, that went into the coating of the pipes. 2.3 On 5-9-2000, the appellants paid Excise Duty relating to coating activity for despatches made during the period 1-7-2000 to 31-8-2000, including the duty on such coated pipes in stock as on 31-8-2000. After 1-9-2000, the removals of Bare Pipes were on payment of duty even on value of coating charges. 2.4 On 4-11-2003, show cause notice was issued alleging - (i) Coating amounts to manufacture (i) Transportation charges collected on average basis on profits made on transport costs, vis-a-vis actuals, of coated pipes being an additional consideration therefore duty w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26/- is required to be demanded and recovered from M/s. PSL Ltd. For the amount of Rs. 89,14,311/- collected in excess during 1-7-2000 to 30-6-2001, the amount of Central Excise duty works out to Rs. 14,26,289/-, however, M/s. PSL Ltd. have paid duty amounting to Rs. 8,59,307/- which apparently appears to have been worked out after adjusting duty towards aggregate deficit of Rs. 35,43,644/- on account of transportation during the said period which is not correct. Since the amount of Rs. 89,34,311/- has been admitted to have been collected in excess than the transportation charges collected from the customers, such amount would form part of assessable value as discussed above and the Central Excise duty amounting to Rs. 14,26,289/- should have been paid by M/s. PSL Ltd. and therefore there is short payment of duty to the tune of Rs. 5,66,983/- for the said period. Similarly, in the details furnished by M/s. PSL Ltd. and in the work sheet given along with the statement of Shri Mann, the excess collection has been shown as NIL for the period from 1-7-2001 to 30-6-2002 apparently considering deficit during the period whereas in fact M/s. PSL Ltd. have collected excess amount of Rs. 1,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this view on manufacture in this case. This appeal, on valuation, has to be determined keeping the same in account. (b) The contracts entered into by the appellants are for sale of Coated Pipes, transportation charges mentioned in the contract pertain to the transportation charges for such coated pipes. The coated pipes are new commercial goods, since coating does not amount to manufacture in the appellants case, as per proceedings consequent to notice dated 2-12-2004, demanding of duty on the profits made on transportation charges, for such coated pipes, therefore cannot be upheld. (c) S.C. decision in the case of CCE v. Acer India Ltd. [2004 (172) E.L.T. 289 (S.C.) wherein Court has held in that case in the paras 54, 55. "goods" which is not excisable if transplanted into a goods which is excisable would not together make the same excisable goods so as to make the assessee liable to pay excise duty on the combined value of both. Excise duty, in other words, would be leviable only on the goods which answer the definition of "excisable goods" and satisfy the requirements of Section 3……." rendering as excisable by definition of value in the machinery provisions contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and transportation has been mutually agreed between the seller (i.e., PSL Ltd.) and the buyer. There is no additional consideration flowing from the buyer to seller qua the bare pipes. Transportation of pipes is a separate effort contract. Hence, profit on transportation will not does not amount to additional consideration in this case to bare pipes. This explanation and application of Rule 6 is therefore not relevant in the facts of this case. (f) Prior to 1-7-2000 the decision of the Supreme Court in the case of Baroda Electric Meters v. CCE - 1997 (94) E.L.T. 13 (S.C.) held that excise duty was a tax on manufacture and not on profit made on transportation charges. This decision would still be applicable under new Section 4 and Valuation Rules, 2000 introduced w.e.f. 1-7-2000, as held by Tribunal in Apollo Tyres v. CCE - [2003 (160) E.L.T. 836 (T) = 2003 (57) RLT 163 (T)] and Kisan Mouldings v. CCE - 2004 (62) RLT 712 (T) nothing contrary has been shown to hold that these decisions cannot be applied following the settled law no cause is made out to add excess transport charges called if any. (g) There is no finding arrived at that the value of the Bare pipes as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
