2011 (8) TMI 841 - AT - Central Excise

Assessable Value - Deduction of freight - Held That - In view of CCE NOIDA vs. Accurate Meters Ltd (2009 - TMI - 32539 - SUPREME COURT), Freight Charges are not includible in calculating Assessable value.

Summary

Issues: Whether freight and insurance charges should be included in the assessable value of goods for Central Excise duty calculation.

Analysis:
1. Background: Three appeals were filed by the Revenue against an order-in-appeal passed by the Commissioner of Central Excise, Mumbai III. The case involved M/s. Maharashtra Control Panels Pvt. Ltd., manufacturers of Control Panels, who claimed deduction towards freight while determining the assessable value. A show-cause notice was issued to explain why transport/insurance charges should not be included in the assessable value, proposing penalties as well.

2. Legal Precedent: The learned SDR for the Revenue acknowledged that the issue of including freight and insurance charges in the assessable value had been settled by the Supreme Court in the case of CCE NOIDA vs. Accurate Meters Ltd. The Supreme Court held that transportation and insurance charges cannot be considered for determining the value of goods supplied, setting a legal precedent for similar cases.

3. Decision: The main issue in this case was whether the freight and insurance charges should be added to the assessable value of goods for Central Excise duty calculation. Given the legal precedent established by the Supreme Court, the Tribunal upheld that the charges should not be included in the assessable value. Consequently, the appeals filed by the Revenue were rejected, and the order of the Commissioner (Appeals) was upheld. Cross Objections filed by the respondents were also disposed of in line with this decision.

This judgment clarifies the treatment of freight and insurance charges in the calculation of assessable value for Central Excise duty, aligning with the legal position established by the Supreme Court. The decision provides guidance for future cases involving similar issues and reaffirms the legal principle that such charges should not be factored into the assessable value of goods for taxation purposes.