2014 (4) TMI 11 - AT - Central Excise

Waiver of pre-deposit of duty - Whether freight charges incurred by the applicant in transferring the goods from their factory to the premises of buyer during the period from 2004-05 to September, 2008 are includible in the assessable value of the finished goods - Held that - applicants are showing both ex factory price as well as freight charges separately in the excise invoices. In view of the judgment of this Tribunal in Haldia Petro Chemical s case &Nav Bharat s case (2008 (12) TMI 47 - CESTAT KOLKATA), we are of the opinion that the applicants could able to make out a case for total waiver of pre-deposit. Accordingly, all dues adjudged is waived and its recovery stayed during the pendency of the appeal - Stay granted.

Summary

Issues:
1. Application seeking waiver of pre-deposit of duty and penalty under Section 11AC of CEA, 1944.
2. Inclusion of freight charges in the assessable value of finished goods.
3. Interpretation of sale at buyer's premises and its impact on assessable value.

Analysis:
1. The judgment addresses an application seeking waiver of pre-deposit of duty and penalty amounting to Rs.5.25 Crores imposed under Section 11AC of CEA, 1944. The key issue revolves around whether the freight charges incurred by the applicant in transferring hazardous chemicals from their factory to the buyer's premises are includible in the assessable value of the finished goods.

2. The applicant, engaged in manufacturing hazardous chemicals falling under Chapter 28 of the CETA, 1985, argued that the necessity of delivering the hazardous chemicals at the buyer's premises is due to the specialized vehicles required for transportation. The Department contended that as per purchase orders and sales conditions, delivery at the buyer's premises is the applicant's responsibility, justifying the inclusion of freight charges in the assessable value.

3. The Tribunal considered previous judgments, including Haldia Petro Chemicals Ltd. and Nav Bharat Fuse Co., where it was held that the cost of transportation from the place of removal to the place of delivery should not form part of the assessable value. The Tribunal emphasized that even if freight charges are shown separately in commercial invoices, they should not be added to the assessable value, aligning with the legal position established by the Apex Court and CBEC circular.

4. Ultimately, the Tribunal found merit in the applicant's argument as they were consistently showing ex-factory price and freight charges separately in excise invoices. Citing precedents, the Tribunal concluded that the applicants had a valid case for a total waiver of pre-deposit. Consequently, all dues were waived, and recovery stayed during the appeal's pendency. The decision was made in favor of the applicant based on the principles established in previous judgments, ensuring compliance with legal provisions and constitutional mandates related to excise duty levy.