2015 (2) TMI 878 - AT - Central Excise

Valuation of goods - Inclusion of transportation charges - Whether the transportation charges for transportation of storage tanks from factory to godown in the cases where buyer takes the delivery of the final product i.e. storage tank from the godown of the respondent are includable in the assessable value or not - Held that - As the goods have been cleared to the customers from their godown by the respondent therefore, whatever transportation charges being paid for transportation of the goods from the factory to the godown are includable in the assessable value. In these circumstances, it is immaterial whomsoever has paid the transportation charges, the same are includable in the assessable value as the goods have been cleared to the customers from the godown only. Therefore, the impugned order is not sustainable on merits. We further find that the respondent has raised the issue of limitation but while filing their price list, they have not stated the fact that in rare cases they are charging transportation charges for the transportation of the goods from the factory to godown when the customer takes the delivery from the godown. As the facts were not made known to the department, therefore extended period was rightly invoked by the Revenue. Therefore, we hold that show-cause notice was issued within time. - impugned order is set aside. The matter is send back to the Adjudicating Authority for quantification of the actual demand to be recovered from the respondent - Decided in favour of Revenue.

Summary

Issues:
Whether transportation charges for moving storage tanks from factory to godown should be included in the assessable value for Central Excise duty purposes.

Analysis:
The appeal was filed by the Revenue against the order where the proceedings against the respondent were dropped by the Commissioner. The case involved the transportation of water storage tanks by the respondent from the factory to the godown and then to customers. The Revenue contended that the transportation charges should be included in the assessable value as the transporter was related to the respondent. The respondent argued that they maintained consistent pricing and only charged transportation fees in specific cases, thus not liable for duty on those charges. The dispute period was from May 1997 to December 2001, with the show-cause notice issued in May 2002.

The main issue was whether transportation charges for moving storage tanks from the factory to the godown, when customers collect the tanks from the godown, should be part of the assessable value. The Tribunal held that since the goods were cleared from the godown to customers, any transportation charges from the factory to the godown should be included in the assessable value. The Tribunal found that the respondent did not disclose the practice of charging transportation fees in some cases, justifying the Revenue's use of the extended limitation period. The impugned order was set aside, and the matter was remanded for quantification of the demand. The Cross objection by the respondent was also disposed of accordingly.

In conclusion, the Tribunal ruled that transportation charges for moving storage tanks from the factory to the godown, when customers collect the tanks from the godown, should be included in the assessable value for Central Excise duty purposes. The respondent's failure to disclose the practice of charging transportation fees in some cases justified the Revenue's use of the extended limitation period, leading to the setting aside of the initial order and remand for quantification of the demand.