2007 (10) TMI 512 - AT - Central Excise

Valuation (Central Excise) - Profit - goods removed from the appellants factory to their buyer s premises during the period of dispute -

Summary

Issues: Valuation of goods for assessable value including excess insurance charges collected from buyers.

In this judgment by the Appellate Tribunal CESTAT, CHENNAI, the primary issue revolved around the valuation of goods removed from the appellants' factory to their buyer's premises during a specific period. The dispute arose from the appellants collecting excess amounts for insurance charges in relation to the freight incurred in supplying the goods but including only the correct insurance premium in the assessable value of the goods. The department contended that the excess amount collected should be included in the assessable value of the goods, leading to show-cause notices and subsequent demands for differential duty with interest. The appeals were filed against the orders of the original authority and the Commissioner (Appeals) by the assessee, challenging the inclusion of excess insurance charges in the assessable value of the goods.

Upon examining the submissions from both sides, the Tribunal found that the issue at hand had already been addressed in previous decisions. The counsel for the assessee referenced cases where amounts collected in excess of insurance charges were held not to be includible in the assessable value of goods, citing the precedent set by the Apex Court in Baroda Electric Meters Ltd. v. Commissioner. The Revenue's representative attempted to distinguish the present case from the cited decisions and relied on a judgment by the Apex Court in Prabhat Zarda Factory Ltd. v. CCE. However, the Tribunal noted that the latter case did not address the specific dispute under consideration. Additionally, a circular by the Board was referenced by the Revenue, but it did not provide clarity on the inclusion of insurance charges in the assessable value. Ultimately, the Tribunal ruled in favor of the appellants, setting aside the impugned orders and allowing the appeals based on the settled issue supported by the decisions cited by the counsel for the assessee.