2014 (12) TMI 491 - AT - Central Excise

Valuation of goods - Determination of assessable value - cost of insurance incurred by the assessee - Held that - There is nothing on record adduced by the Revenue to show that the place of removal was not the factory. On the other hand the lorry receipts under which the goods were consigned indicate that the consignee is the buyer and the freight is to pay basis . Therefore, we are of the view that the conclusion draw by the lower appellate authority cannot be faulted. - Decided against Revenue.

Summary

Issues:
- Appeal against Order-in-Appeal denying duty demand on insurance cost incurred by assessee
- Determination of place of delivery based on recovery of insurance amount from customers

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI involved a dispute regarding the duty demand on the cost of insurance incurred by the assessee. The Revenue challenged the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai, which held that the duty demand was not admissible as the goods were delivered at the assessee's factory gate. The Revenue argued that since the assessee collected the insurance amount from customers, the place of delivery should be deemed as the customer's premises, making the impugned order unsustainable in law.

In response, the counsel for the respondent contended that the goods were cleared from the factory, with lorry receipts showing the consignee as the buyer and freight on a "to pay basis." It was argued that the recovery of insurance cost by the appellant did not alter the place of removal to the customer's premises. The lower appellate authority's decision, based on a precedent involving Escorts JCB Ltd, was upheld as legally sound.

Upon careful consideration of the submissions, the Tribunal found no evidence presented by the Revenue to dispute that the place of removal was not the factory. The lorry receipts clearly indicated the consignee as the buyer and freight on a "to pay basis," supporting the conclusion that the factory was the place of removal. Consequently, the Tribunal dismissed the Revenue's appeal, deeming it meritless. The respondent's cross objection was also disposed of in line with the dismissal of the appeal.