2006 (7) TMI 495 - AT - Central Excise

Valuation - Transportation charges - includibility - Held that - the delivery charges should not be included for the purpose of Central Excise duty - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeals against Orders-in-Original - Inclusion of delivery charges in assessable value for Central Excise duty.

Detailed Analysis:

1. Facts of the Case:
The appellant, a Public Sector Undertaking, operates a bonded warehouse for storing LPG. The dispute revolves around the inclusion of delivery charges in the assessable value for Central Excise duty, specifically related to transportation from Bottling Plants to dealers' premises.

2. Legal Arguments by Appellant:
The appellant argued based on precedents, including a case involving Indian Oil Corporation, emphasizing that transportation charges should not be part of the assessable value. They highlighted that the delivery charges were fixed by the Central Government and should not be dissected as actual or notional amounts, especially without evidence of value shifting.

3. Precedents and Board Circular:
The appellant cited a previous order where equalized freight was allowed, and no appeal was filed by the Department, indicating finality. Referring to a Board Circular, they argued for consistent application of assessment principles, even post a specified date.

4. Legal Precedents and Case Laws:
The appellant relied on various case laws, such as Apollo Tyres Ltd. and PSL Ltd., to support their stance that profit from freight should not be included in the assessable value. They also cited cases like Majestic Auto Ltd. and West Coat Paper Mills Ltd. to emphasize the exclusion of delivery charges from the assessable value, even if not separately mentioned in the invoice.

5. Decision of the Tribunal:
After considering the arguments and reviewing the case records, the Tribunal found that the delivery charges should not be included in the assessable value for Central Excise duty. They noted that transportation costs are distinct from manufacturing activities and referenced previous Tribunal decisions supporting this view. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the delivery charges should not be considered for Central Excise duty assessment, based on established legal principles and precedents.