2013 (12) TMI 165 - AT - Central Excise

Nexus between freight and Assessable value - whether the deduction of equalized freight is required to be restricted to the actual freight incurred and the excess amount so collected has to be added to the assessable value Held that - Following Baroda Electric Meters Limited Vs. CCE 1997 (7) TMI 126 - SUPREME COURT OF INDIA - Excess recovery of freight than the actual expenses on account of freight cannot be said to have any nexus with the value of the excisable goods. Laffa Charges to be included in the value of Assessable value - Whether the Laffa charges collected from the customers which are for the purpose of avoiding of the glass shifted during transit by placing wooden baton in between the two sheets are required to be added in the assessable value or not, where the goods are delivered at the buyer s premises Held that - The expenditure incurred on this account cannot form part of the value, as it is not a part of primary packing Relying upon Window Glass Ltd. Vs. CCE 1988 (10) TMI 154 - CEGAT, NEW DELHI - Deduction on account of Jam packing charges allowed - blocking of loose space between the two glass sheets is transportation essentiality and is more in the nature of the transportation charges - The same cannot be held to be a regular packing of the goods so as to add the value of the same in the assessable value there was no infirmity in the order Decided against Revenue.

Summary

Issues involved:
1. Dispute regarding deduction of equalized freight incurred by the respondent.
2. Issue of whether Laffa charges collected by the respondent should be added to the assessable value.

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Analysis:

Issue 1: Dispute regarding deduction of equalized freight incurred by the respondent

The dispute in this appeal revolves around whether the deduction of equalized freight incurred by the respondent should be restricted to the actual freight incurred by them, and if any excess amount collected should be added to the assessable value. The Commissioner had relied on various decisions, including the case of Baroda Electric Meters Limited Vs. CCE, where it was held that excess recovery of freight, if not related to the value of excisable goods, should not impact the assessable value. The Revenue failed to prove that the excess freight recovery was linked to diverting the value of glass sheets. The Tribunal found no fault in the Commissioner's decision to drop the demand based on this issue.

Issue 2: Whether Laffa charges collected by the respondent should be added to the assessable value

Regarding the Laffa charges collected by the respondent for securing glass sheets during transit, the Commissioner concluded that these charges should not form part of the assessable value. The Commissioner observed that jam packing done by using wooden batons between glass sheets was essential to prevent damage during transportation and was more akin to transportation charges than regular packing. The Commissioner cited the case of Geep Industrial Syndicate Ltd., where deduction of packing charges for wooden boxes was allowed to prevent damage in transit. The Tribunal concurred with the Commissioner's decision, stating that the jam packing charges were essential for transportation and not regular packing, hence not adding to the assessable value. The Tribunal upheld the decision, rejecting the Revenue's appeal.

In conclusion, the Tribunal upheld the Commissioner's decision on both issues, emphasizing that excess freight recovery unrelated to goods' value should not impact assessable value and that charges for securing goods during transit should not be considered as part of the assessable value.