2004 (1) TMI 682 - AT - Central Excise

Summary

Issues:
Challenge against order on refund claims for central excise duty paid on difference between freight and insurance collected from customers and actually incurred. Challenge against order considering difference in freight and insurance charges as part of assessable value of motor cycle.

Analysis:
In the present case, the appeals were filed by the assessee challenging the orders passed by the Commissioner (Appeals) related to refund claims and the assessable value of motor cycles. The first appeal, No. 2540/2003, contested the order concerning refund claims for the period April 1997 to January 1998, amounting to Rs. 49,81,632, paid on the difference between freight and insurance collected from customers and the actual expenses incurred. The second appeal, No. 2541/2003, challenged the order considering the difference between freight and insurance charges collected from buyers and actually incurred as part of the assessable value of motor cycles for the period April 1997 to March 1999. Additionally, the subject matter of appeal E/2542/2003 for the period April 1999 to March 2000 also pertained to the same issue, contesting the order passed by the Commissioner (Appeals) on 22.7.2003.

During the proceedings, the Learned Counsel for the appellant and the Learned Departmental Representative presented their arguments. Referring to previous orders, the Tribunal highlighted that in a prior decision, it was established that the sale occurs at the factory gate, and therefore, the freight and insurance charges cannot be included in the assessable value. Citing the case of Baroda Electric Meters Ltd. vs. CCE, the Tribunal noted that the Supreme Court had ruled that the difference between the amount collected by the manufacturer as freight and insurance and the actual expenses incurred should not be part of the assessable value. Applying the ratio of the Supreme Court decision to the current appeals, the Tribunal set aside the impugned orders and allowed the appeals, entitling the appellant to all consequential relief.

The operative part of the order, containing the decision to set aside the orders and allow the appeals, was pronounced in court on 13.1.2004. The Tribunal's decision was based on the interpretation of relevant legal principles and precedents, ensuring that the central excise duty refund claims and the assessable value of motor cycles were determined in accordance with established legal standards and judicial interpretations.