2008 (3) TMI 538 - AT - Central Excise

Summary

Issues:
Interpretation of transit insurance charges in relation to assessable value for duty calculation.

Analysis:
The case involved a dispute regarding the treatment of transit insurance charges collected by the applicant in the sale of "writing & printing paper." The applicant collected an amount significantly higher than the actual insurance premium paid to the insurance company during the relevant period. The Department contended that the excess amount collected should be included in the assessable value for duty calculation.

The applicant argued that as long as customers were informed that insurance was arranged by them and consented to it, the actual amount recovered should be irrelevant, citing previous judgments. However, the Department emphasized the post-amendment requirement to consider the actual transaction value of each consignment and include all amounts collected in connection with the sale in the assessable value.

The Tribunal noted that the applicant was not authorized to provide insurance services, and the insurance was provided by a licensed insurance company. The actual premium paid to the insurance company was deemed excludable for calculating the assessable value. Given the disproportionate amount collected compared to the premium paid, the Tribunal found the excess charges could not be solely attributed to insurance. Consequently, the Tribunal held that the applicant failed to establish a strong case for waiving the total duty demanded by the Department.

As the applicant did not demonstrate financial hardship and was directed to deposit the entire duty amount within eight weeks, the Tribunal granted a waiver on the pre-deposit of the penalty. The case was scheduled for compliance reporting on a specified date.

In conclusion, the Tribunal ruled against the applicant, emphasizing the importance of the actual premium paid to the insurance company in determining the assessable value and rejecting the argument that the amount collected from customers could be disregarded based on customer consent alone.