2015 (5) TMI 1002 - AT - Central Excise

Excess collection of amount of freight added to assessable value of the goods - excess recoveries on account of freight - Held that - The issue is covered by the Hon ble Supreme Court s decision in the case of Baroda Electric Meters Ltd. 1996 (3) TMI 242 - CEGAT, NEW DELHI as also in the case of Accurate Meters Ltd. V. Commissioner 2009 (3) TMI 1 - SUPREME COURT . There is plethora of decisions of the Tribunal holding that such excess collection on account of freight cannot form part of the assessable value of the goods unless the Revenue produces evidence to show that value of the goods was collected in the garb of the freight charges. There is no such evidence available much less any allegation in the present appeal. As such I find no reasons to interfere in the impugned order of the authorities below, which are based upon the declaration of law by the Hon ble Supreme Court - Decided against revenue.

Summary

Issues: Appeal against the order of Commissioner (Appeals) upholding the dropping of demand against the assessee for excess freight charges forming part of the assessable value of goods.

Analysis:
1. The respondents are involved in the manufacture of PSCC poles supplied to electricity boards. The issue arose when the Revenue initiated proceedings against the appellants for adding excess freight charges to the assessable value of goods, resulting in a demand. The appellants settled the matter with the settlement commission and began paying duty on the excess recoveries of freight. However, they later filed refund claims, which were sanctioned by the original adjudicating authority based on the decision in Baroda Electric Meters Ltd. v. Collector.

2. The Revenue filed an appeal against the refund claims, citing the decision in Mercedes-Benz India Pvt. Ltd. v. CCE, Pune-I, where it was held that excess road delivery charges would form part of the assessable value. The respondents pointed out that the decision in Mercedes-Benz India Pvt. Ltd. was challenged in the Hon'ble Bombay High Court, which remanded the matter to the Tribunal. In the subsequent Tribunal proceedings, it was established that such excess collections should not be included in the assessable value.

3. The Judicial Member referred to the Supreme Court's decisions in Baroda Electric Meters Ltd. and Accurate Meters Ltd. v. Commissioner, along with various Tribunal decisions, indicating that excess freight charges should not be part of the assessable value unless there is evidence showing that the value of goods was collected under the guise of freight charges. In the absence of such evidence or allegations in the present case, the impugned order was upheld, and the Revenue's appeal was rejected based on established legal principles.

This comprehensive analysis highlights the legal intricacies involved in the judgment, focusing on the interpretation of assessable value concerning excess freight charges and the precedents set by various court decisions and Tribunal rulings.