2015 (2) TMI 695 - AT - Central Excise

Valuation of goods - refund under area based exemption - inclusion of transport charges - Benefit of Notification No.56/2002-CE dated 4.11.2002 - Held that - Sale is on FOR destination basis and the destination is the buyer s premises. The cost of transportation is included in the assessable value and the transit insurance has also been taken by the appellants in their name for safe transport of the goods. Thus, it is evident that the ownership of the goods remained with the appellants upto the place of delivery at the buyers premises. In other words, the point of sale is the buyers premises. In these circumstances the place of removal, as per definition in section 4 of the Central Excise Act, 1944 becomes the buyers premises, as that is the place or premises from where the excisable goods were sold after the clearance from the factory from where such goods were removed. That being the case, the freight charges are clearly includible in the assessable value. Therefore, duty paid by them on the impugned goods on value inclusive of the freight charges has been correctly paid and consequently the impugned refund (self-credit) thereof under notification No. 56/2002-CE has also been correctly taken. The decision of the Chattisgarh High Court in the case of Ultratech Cement Ltd. Vs. CCE Raipur 2014 (8) TMI 788 - CHHATTISGARH HIGH COURT is also in harmony with the view taken by Punjab & Haryana High Court (2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT) in this regard. In the wake of the foregoing analysis and judicial precedents, the judgement of CESTAT in case of Aditya Birla Insulators Ltd. Vs. Commissioner, Central Excise, Kolkata-IV 2008 (4) TMI 48 - CESTAT, KOLKATA holding a contrary view clearly stands over-ruled. Thus, the appellants rightly included the cost of transportation in the assessable value. This issue having thus been settled in the appellants favour, the duty was correctly paid and hence the impugned refund correctly taken. Extended period has also been invoked in respect of the Order-in-Original dated 31.12.2012. In this regard, we find that it has not been brought out as to what which was required to be brought to the notice of the Department as per any provision law was not brought to the department s notice. The appellants had been filing their ER-1 returns showing all the details required to be shown therein. It has been held by Supreme Court in the case of Commr. Vs. Champhar Drugs Liniments 1989 (2) TMI 116 - SUPREME COURT OF INDIA that something positive other than mere inaction or failure on the assessee s part or conscious withholding of information when assessee knew otherwise is required for invoking extended period. In case of Gopal Zarda Udyog vs. CCE, Delhi, Supreme Court observed that mere failure or negligence on the part of the manufacturer does not attract the extended period. - Decided in favour of assessee.

Summary

Issues:
- Disallowance of self-credit (refund) of Central Excise duty
- Inclusion of transport charges in assessable value
- Invocation of extended period for the Order-in-Original

Issue 1: Disallowance of self-credit (refund) of Central Excise duty:
The appellants filed stay applications and appeals against Order-in-Appeal and Order-in-Original that disallowed self-credit of Central Excise duty. The dispute arose from the inclusion of freight charges in the assessment value, leading to the demand for recovery of the duty paid in cash. The appellants argued that they correctly paid the duty eligible for refund under Notification No.56/2002-CE as they sold goods on FOR destination basis, retaining ownership and responsibility until delivery. The Tribunal analyzed the ownership of goods, point of sale, and relevant legal provisions to determine the correctness of the duty paid and the subsequent refund claimed.

Issue 2: Inclusion of transport charges in assessable value:
The key question revolved around whether the transport charges incurred by the appellants for delivering goods to the buyers' premises should be included in the assessable value. The Tribunal examined sales orders, invoices, ownership transfer points, and legal definitions to establish that the freight charges were properly includible in the assessable value. Relying on judicial precedents, including decisions from the High Courts and CBEC Circulars, the Tribunal concluded that the appellants rightly included transportation costs in the assessable value, leading to the correct payment of duty and refund claimed.

Issue 3: Invocation of extended period for the Order-in-Original:
Regarding the invocation of the extended period for the Order-in-Original, the Tribunal noted that the requirement for invoking the extended period was not met as nothing positive beyond mere inaction or failure on the assessee's part was brought to the Department's notice. Citing Supreme Court rulings emphasizing the need for specific actions to trigger the extended period, the Tribunal concluded that as the appellants succeeded on merits, further deliberation on the time bar issue was unnecessary. Consequently, the appeals were allowed based on the analysis and findings on the primary issues discussed.

This detailed analysis of the judgment highlights the legal intricacies involved in the dispute over Central Excise duty refund, assessable value determination, and the application of the extended period provision, providing a comprehensive overview of the Tribunal's decision.