2013 (10) TMI 842 - AT - Central Excise

Assessable Value Place of removal - delivery at customer s factory gate - inclusion of cost of transportation - Held that - The assessable value has to be determined in respect of each removal of the excisable goods and the value on which the duty is liable to be paid in a case where the goods are sold by the assessee for delivery at the time and place of removal and the assessee and the buyer are not related and the price is the sole consideration for sale, is the transaction value - the price for levy of excise duty is the transaction value for delivery of the excisable goods at the time and place of removal. If goods are delivered at the customers premises, whether at appellant s own volition or at the request of the customer, that should not make any difference in the assessable value of the goods because the goods are sold for delivery at the customers premises and as per Section 4, the price is the sale value of the goods for delivery at the time and place of removal - As per the definition of place of removal when the goods are sold at the customers premises for delivery, it is the customers premises which is the place of removal - there was no merit in the argument of the appellant that where the goods are delivered at the customers premises at a pre-agreed rate of transportation, the cost of transportation should be excluded from the sale price to arrive at the assessable value. Time-Barred Appeal Waiver of Pre-deposit - Held that - The declaration made in the ER-1 return is only with respect to availment of CENVAT credit on the GTA services paid by the appellant - Availment of credit has nothing to do with the valuation of excisable goods - this declaration in the ER-1 returns no way shows that the appellant has declared the correct value or revealed the entire nature of the transactions to the department - the plea of time-bar raised by the appellant is prima facie not admissible in the absence of a prima facie case and financial hardship, balance of convenience lies in favour of the Revenue - the appellant directed to make a pre-deposit of four crore upon ssuch submission rest of the dues adjudged against the appellant shall stand waived and recovery stayed during the pendency of the appeal Partial stay granted.

Issues Involved:
1. Determination of 'place of removal' for the purpose of excise duty.
2. Applicability of excise duty on transportation charges.
3. Relevance of previous case laws under the old Section 4 of the Central Excise Act.
4. Admissibility of the plea of time-bar.
5. Consideration of financial hardship for stay of recovery.

Issue-wise Detailed Analysis:

1. Determination of 'Place of Removal' for the Purpose of Excise Duty:
The appellant argued that the 'place of removal' in their case should be considered the factory gate, and therefore, excise duty on transportation charges from the factory to the buyer's premises should not be applicable. The tribunal, however, clarified that under the new Section 4 of the Central Excise Act, effective from 01/07/2000, the 'place of removal' can be the factory, warehouse, or any other place where the excisable goods are sold or removed. It was determined that when goods are delivered to the customer's premises, the customer's premises become the 'place of removal.' Thus, excise duty should be levied on the transaction value, which includes transportation charges to the customer's premises.

2. Applicability of Excise Duty on Transportation Charges:
The appellant contended that in cases where transportation charges were shown separately in the invoices, excise duty should not be levied on these charges. The tribunal rejected this argument, stating that the transaction value, as per the new Section 4, includes all expenses incurred up to the point of delivery to the customer, including transportation charges. Therefore, excise duty is applicable on the total transaction value inclusive of transportation charges.

3. Relevance of Previous Case Laws under the Old Section 4:
The appellant relied on several decisions from the Supreme Court and Tribunal under the old Section 4, which did not consider transportation charges in the assessable value. The tribunal noted that these decisions were not applicable post-01/07/2000, as the new Section 4 introduced the concept of 'transaction value' and expanded the definition of 'place of removal.' Consequently, the old case laws were deemed irrelevant for transactions occurring after the new Section 4 came into effect.

4. Admissibility of the Plea of Time-Bar:
The appellant argued that the demand was time-barred as they had declared their transactions in the ER-1 returns. The tribunal found that the ER-1 returns only disclosed the availment of CENVAT credit on GTA services and did not reveal the full nature of transactions or the correct value. Therefore, the plea of time-bar was not accepted, as the declarations in the ER-1 returns were insufficient to establish transparency about the valuation of excisable goods.

5. Consideration of Financial Hardship for Stay of Recovery:
The appellant did not present any evidence of financial hardship. In the absence of a prima facie case and any proof of financial difficulty, the tribunal ruled in favor of the Revenue. The appellant was directed to make a pre-deposit of Rs. 4 crore within eight weeks, with the balance of dues waived and recovery stayed pending the appeal.

Conclusion:
The tribunal upheld the demand for excise duty on transportation charges, rejected the relevance of old case laws under the previous Section 4, and dismissed the plea of time-bar. The appellant was required to make a substantial pre-deposit for the stay of recovery, reflecting the tribunal's emphasis on compliance with the revised provisions of the Central Excise Act.

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