2009 (10) TMI 763 - AT - Central Excise

Summary

Issues:
- Appeal against the decision of the Commissioner (Appeals) regarding the inclusion of transportation cost in the assessable value.
- Interpretation of the contract terms regarding delivery and ownership of goods.
- Application of Section 4 of the Central Excise Act, 1944 on transportation charges.
- Consideration of CBEC Manual and previous legal decisions.

Analysis:
1. The appeal before the Appellate Tribunal CESTAT MUMBAI involved a dispute over the inclusion of transportation cost in the assessable value by the Revenue. The Commissioner (Appeals) had previously ruled in favor of the respondents, a manufacturer of various machinery required by pharmaceutical companies, stating that the cost of transportation recovered by the respondents should not be included in the assessable value.

2. The Revenue contended that as per the contract terms, delivery was to be made at the buyer's premises, and ownership of the goods changed only upon delivery at the site. The Revenue argued that under Section 4 of the Central Excise Act, 1944, when delivery is at the buyer's premises, transportation charges should be included in the transaction value.

3. The learned DR representing the Revenue referred to the Joint Commissioner's Order-in-Original, emphasizing that the machinery was to be delivered to the buyer's premises, thus necessitating the inclusion of transportation charges. However, the respondents' Advocate presented a purchase order indicating that the price was ex-works, with transportation charges specified separately. The Advocate relied on the CBEC Manual and cited legal precedents to support the exclusion of transportation charges when shown separately in invoices.

4. After considering the arguments from both sides, the Tribunal found merit in the respondents' position. The purchase order clearly indicated that the price was ex-works, and transportation charges were additional. The Tribunal noted that the CBEC Manual and legal decisions cited by the respondents supported their case. Consequently, the Tribunal rejected the Revenue's appeal, affirming the decision of the Commissioner (Appeals) regarding the exclusion of transportation costs from the assessable value.

Conclusion:
The Appellate Tribunal CESTAT MUMBAI upheld the decision that transportation costs recovered by the respondents, a manufacturer of pharmaceutical machinery, should not be included in the assessable value. The Tribunal based its decision on the contract terms, the application of Section 4 of the Central Excise Act, 1944, and the supporting references from the CBEC Manual and legal precedents cited by the respondents.