2011 (3) TMI 1213 - AT - Central Excise

Demand - Whether cost of transportation and insurance charges incurred on taking the goods up to the place of removal was includable in the assessable value - Held that - As decided in Escorts JCB Ltd. Vs. CCE (2002 (10) TMI 96 - SUPREME COURT OF INDIA) it is clear that the ownership in property may not have been any relevance in so far as insurance of goods sold during transaction is concerned. It would therefore not be lawful to draw an inference of retention of ownership in the property sold by the seller merely by reason of the fact that the seller had insured such goods during transit to buyer - Decided in favor of the assessee

Summary

Issues:
1. Determination of place of removal based on ownership of goods and insurance charges.
2. Applicability of previous judgments in similar cases.
3. Validity of penalties imposed.

Analysis:

Issue 1: Determination of place of removal based on ownership of goods and insurance charges
The appeal was filed by the Revenue against the order dropping the demand confirmed against the respondent by the adjudicating authority. The main issue revolved around whether insurance could be the sole determinant of the ownership of goods and, consequently, the place of removal. The Tribunal referred to the case of Escorts JCB Ltd. vs. CCE, where the Apex Court observed that ownership in property may not be relevant in determining the place of removal based on insurance of goods sold during a transaction. The Tribunal upheld the decision of the lower appellate authority, which set aside the demand confirmed by the adjudicating authority, citing the Apex Court's ruling. Additionally, the Tribunal highlighted a previous case involving the appellant where a similar issue was decided in favor of the appellant, further supporting the decision to reject the Revenue's appeal.

Issue 2: Applicability of previous judgments in similar cases
The Tribunal considered previous judgments, such as the case of Escorts JCB Ltd. vs. CCE and Associate Strips Ltd., which were approved by the Hon'ble Apex Court. These judgments played a crucial role in determining the outcome of the current appeal, as they established precedents regarding the determination of the place of removal based on ownership and insurance charges. By following the decisions in these cases, the Tribunal found the demand in the present case to be unsustainable, leading to the rejection of the Revenue's appeal.

Issue 3: Validity of penalties imposed
In addition to the main issue of determining the place of removal, penalties were also imposed on the respondent in the adjudication order. However, since the demand itself was found to be unsustainable based on the ownership and insurance charges criteria, the Tribunal did not find any infirmity in the impugned order. Consequently, the penalties imposed were not addressed separately in the judgment, as the main issue of demand confirmation was the deciding factor in the appeal.

Overall, the Tribunal's decision was based on the interpretation of ownership of goods, insurance charges, and the applicability of previous judgments in similar cases, leading to the rejection of the Revenue's appeal and upholding the impugned order in favor of the respondent.