2011 (8) TMI 153 - AT - Customs

Demand - Undervaluation - Circular No. 59/1/2003-CX dated 03.03.2003 - learned Commissioner (Appeals) has recorded a very factual finding to the effact that respondent has collected the actual amount of transportation charges from the customers through debit notes - It can also be seen from the grounds of appeal reproduced herein above the Revenue has not controverted this factual finding by any contrary evidence - Appeal is rejected

Summary

Issues:
Appeal against order in appeal regarding under valuation of consignments by not discharging duty liability on freight charges.

Analysis:
The appeal was filed by the Revenue against the order in appeal No. OIA No. KS/256/Daman/2006 dated 03.8.2006. The respondent was charged with under valuation of consignments for not discharging duty liability on freight charges collected from customers. The adjudicating authority confirmed the demand with interest and imposed penalties. On appeal, the learned Commissioner (Appeals) set aside the original order based on various judgments and the facts of the case, leading to the Revenue's appeal.

The main contention revolved around the determination of the point of sale for excisable goods. The Commissioner (Appeal) set aside the original order, stating that the place of removal was the factory gate, not the customer's site, hence the freight charges were not required to be included in the assessable value. The Board's Circular directed to determine the point of sale in each case of removal, considering relevant Supreme Court judgments. However, the Commissioner (Appeal) did not examine this aspect while setting aside the original order, leading to the appeal for remand to determine the point of sale for each clearance during the specified period.

During the hearing, the learned Commissioner (Appeal) made factual findings that the respondent had collected the actual amount of transportation charges from customers through debit notes. The Revenue did not provide contrary evidence to refute this finding. As per Rule 5 of Valuation Rules and relevant Circulars, the actual cost charged from buyers could be abated, and it was not mandatory to show the actual cost in the invoices. The place of removal and point of sale being the factory gate, the appellants satisfied the conditions of Rule 5, justifying the setting aside of the original order.

Ultimately, the Tribunal found that the appeal filed by the Revenue lacked merit and deserved rejection. The impugned order was upheld, and the Revenue's appeal was rejected, as the factual findings of the learned Commissioner (Appeal) were not controverted by any contrary evidence, making the impugned order legally sound and correct.