2006 (2) TMI 389 - AT - Central Excise

Appeal to Appellate Tribunal - Demand - Limitation - Larger period - Invocation of - Valuation

Summary

Issues:
Inclusion of transportation charges in the assessable value of Cylinders manufactured and cleared by the appellants.

Analysis:
The issue at hand pertains to the inclusion of transportation charges in the assessable value of Cylinders manufactured and cleared by the appellants. Following a remand, the Commissioner determined that the case falls within Section 4(1)(b) of the Central Excise Act, 1944, a decision vehemently contested by the appellants. The crux of the matter revolves around whether the goods were removed directly from the factory and consigned to the factory nominated by the consigner, thus falling under Section 4(1)(a) as argued by the appellants, or under Section 4(1)(b) as contended by the Revenue. The appellants challenge the findings of the adjudicating authority, leading them to seek relief before the tribunal.

The learned Consultant for the appellants highlighted several crucial points to support their case. Firstly, emphasizing the significance of relevant documents like invoices and lorry receipts to establish the direct removal of goods from the factory to the consignee's factory. Reference was made to a Supreme Court decision indicating that delivery to the lorry driver signifies transfer to the consignee. The Consultant argued that the place of removal is the factory gate, aligning the case with Section 4(1)(a). Additionally, discrepancies in the Purchase Order of the consignee were pointed out to challenge the Revenue's classification under Section 4(1)(b).

Upon careful examination of the case records, the tribunal disagreed with the Commissioner's classification under Section 4(1)(b) and sided with the appellants' position. It was noted that the basic price of the Gas Cylinders, as indicated in the invoices and purchase order, aligns with Section 4(1)(a). Despite the appellants undertaking transportation responsibility for the convenience of buyers, who are Public Sector Undertakings, the tribunal emphasized that the manufactured product is ready for delivery at the factory gate. Even though the appellants arrange transportation, the freight is separately paid by the buyers, indicating the availability of a 4(1)(a) price. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief.

In conclusion, the tribunal's decision underscores the importance of correctly determining the assessable value concerning transportation charges in cases of manufactured goods, ensuring alignment with the relevant provisions of the Central Excise Act, 1944.