2010 (9) TMI 488 - AT - Central Excise

Assessable value - Freight and insurance charges - With effect from 1-3-2003, Rule 5 of the Central Excise (Valuation) Rules, 2000 has been amended and the Explanation to the amended Rule 5 stipulates that the freight from the factory to the depot shall be included in the assessable value - Depots and premises of consignment agents were excluded from the definition of place of removal under the Central Excise Law during the period 1-7-2000 to 13-5-2003. Held that both the impugned periods in respect of these two appeals are prior to inclusion of the premises of the consignment agents in the definition of place of removal and prior to amendment of Rule 5 of the Central Excise (Valuation) Rules - Thus, transportation and insurance charges from the factory premises to the premises of consignment agents were not includible in the assessable value during the impugned periods.

Summary

Issues:
- Inclusion of freight and insurance charges in the assessable value of goods transferred from factory premises to consignment agents' premises.

Analysis:
The judgment involved two appeals concerning the inclusion of freight and insurance charges in the assessable value of goods transferred from the factory premises to the consignment agents' premises. The disputed periods for the appeals were specified - June 2001 to February 2002 for one appeal and April 2002 to September 2002 for the other. The lower appellate authorities had ruled that such inclusion was not required, leading to the Department filing these appeals.

During the relevant periods, depots and premises of consignment agents were excluded from the definition of "place of removal" under the Central Excise Law. It was noted that Rule 5 of the Central Excise (Valuation) Rules, 2000 was later amended to include freight from the factory to the depot in the assessable value. However, this amendment came into effect after the periods in question for these appeals. The Tribunal had previously decided against the inclusion of freight and insurance charges in the assessable value during the relevant periods, citing precedents such as Jindal (I) Ltd. v. CCE, Kolkata and Ispat Industries Ltd. v. CCE, Nagpur. The consistent view taken by different Benches of the Tribunal supported the non-inclusion of transportation and insurance charges during the impugned periods.

Therefore, based on the precedents and the legal provisions applicable during the disputed periods, the Tribunal held that the transportation and insurance charges from the factory premises to the consignment agents' premises were not includible in the assessable value. Consequently, both appeals filed by the Department were dismissed. The operative portion of the order was pronounced in open court upon completion of the hearing.