2002 (9) TMI 519 - AT - Central Excise

Summary

Issues:
1. Waiver of payment of duty confirmed by the impugned authority and penalty.
2. Dispute regarding the concept of depot price for assessment under Central Excise Tariff Act.
3. Determination of the place of removal for excise duty calculation.
4. Passing of title and appropriation of goods in the context of transportation and insurance charges.
5. Interpretation of Sale of Goods Act in relation to excise duty assessment.
6. Comparison of judgments in Escort JCB v. CCE and CCE v. Prabhat Zarda with the current case.
7. Evaluation of the Tribunal's decision in Associated Strips Ltd. v. CCE.

Analysis:

1. The judgment dealt with an application for the waiver of duty and penalty. The impugned order by the Commissioner held that the dispute centered around the introduction of depot price for assessment, disallowing abatement of freight and insurance charges for assessable value calculation.

2. The appellant, engaged in manufacturing power line courier systems, faced a show cause notice for allegedly evading duty by misrepresenting the place of removal. The Commissioner held that customer premises constituted the place of removal post-introduction of a new definition under section 4 of the Central Excise Act.

3. The appellant contended that once goods are handed to the carrier, the title transfers to the consignee, relying on the Sale of Goods Act. Reference was made to the Tribunal's decision in Associated Strips Ltd., emphasizing the passage of title upon delivery to the transporting agency.

4. The argument was countered by the Departmental Representative citing judgments in Escort JCB v. CCE and CCE v. Prabhat Zarda. However, the Tribunal distinguished these precedents in the case of Associated Strips Ltd., asserting that transportation and insurance charges post-appropriation cannot impact valuation.

5. The Tribunal opined that the demand on the assessee was incorrect as appropriation occurred at the factory gate, and subsequent actions such as transportation were post-appropriation services. The relationship between the manufacturer and consumer was deemed contractual for transportation and insurance, influencing the prima facie view favoring the appellant.

6. In light of the above analysis, the Tribunal decided to waive deposit and stay recovery during the appeal's pendency, indicating a preliminary inclination towards the appellant's position based on the interpretation of legal principles and precedents cited in the case.