2013 (11) TMI 1162 - AT - Central Excise

Transaction Value Inclusion of Transport charges - Waiver of Pre-deposit - Whether the transaction value should include transport charges incurred in connection with the sale of the finished goods by the appellant to the customers and delivered at the place of the buyer Held that - Prima facie the matter needs threadbare examination looking into various agreements in question and also the modus operandi followed by the appellant and deals with the buyers - Prima facie it appears the case is in favour of the appellant Thus there shall be waiver of pre-deposit during pendency of the appeal stay granted.

Summary

Issues:
1. Inclusion of transport charges in the transaction value for the sale of finished goods.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore, delivered by Mr. D. N. Panda, revolves around the question of whether the transaction value should encompass transport charges incurred in connection with the sale of finished goods. The appellant contended that the composite contract executed for delivering goods at the buyer's place included transport costs, which were separable from the delivery of goods. The appellant sought to be governed by Rule 5 of the Valuation Rules to deduct transportation charges from the assessable value.

The appellant's argument was supported by references to previous decisions, including the case of CCE, Noida vs. Accurate Meters Ltd. and Aditya Birla Insulators Ltd. vs. CCE, Kolkata. These precedents highlighted that when there is a clear indication of the cost of transport followed by the transfer of ownership at the factory gate, it precludes assuming the place of delivery as the buyer's point. The Revenue, however, supported the adjudication order.

The Tribunal acknowledged the need for a thorough examination of the agreements and operational procedures between the appellant and the buyers. While recognizing the complexity of the matter, the Tribunal found the balance of convenience to be in favor of the appellant. Consequently, the Tribunal ruled in favor of the appellant by waiving the pre-deposit during the pendency of the appeal. The judgment underscores the importance of analyzing the specific terms of contracts and operational practices to determine the inclusion of transport charges in the assessable value of goods.