2015 (2) TMI 1052 - AT - Central Excise

Valuation of goods - Inclusion of charges for loading, unloading, transportation and warehousing - Held that - The goods are not sold and these are cleared from the factory, but these are transported and stored in Hyderabad in transporter's warehouse. As and when appellant gets the order, they direct transporter/warehouse owner to deliver the said goods to the customer's place. Thus, the act of sale takes place on premises of the customer and for this purpose appellant is charging ₹ 65 per drum, as freight, loading, unloading charges. - Following decision of Hard Castle Petrofer Pvt. Ltd. (2014 (4) TMI 336 - CESTAT NEW DELHI) - No merit in appeal - Decided against assessee.

Summary

Issues:
- Whether charges for loading, unloading, transportation, and warehousing should be added to the assessable value of goods for excise duty calculation when no sale has taken place at the factory premises.
- Interpretation of the Central Excise Valuation Rules, 2000 regarding the assessable value of goods in a FOR basis sale scenario.

Analysis:
1. The case involved a dispute where the appellants, manufacturers of drums/containers, were transporting goods to a transporter's warehouse for further delivery to customers without a sale taking place at the factory. The revenue demanded that charges for services related to transportation and warehousing should be added to the assessable value of the goods.

2. The appellants chose not to attend the hearing and the learned AR argued that since no sale occurred at the factory premises, the charges for storing goods in Hyderabad should be included in the assessable value. The AR relied on a previous Tribunal judgment to support this argument.

3. The Tribunal considered the submissions and observed that the goods were not sold at the factory but were transported and stored in Hyderabad until an order was received. The act of sale took place at the customer's premises, where the goods were delivered from the transporter's warehouse. The Tribunal referenced a previous judgment to support the view that in a FOR basis sale scenario, the assessable value should include expenses up to the customer's premises.

4. Based on the factual position and the interpretation of the Central Excise Valuation Rules, the Tribunal found no merit in the appeal and dismissed it. The decision was in line with the understanding that in a FOR basis sale, the assessable value should encompass expenses up to the customer's premises, including freight charges.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, relevant legal interpretations, and the Tribunal's decision in resolving the dispute regarding the assessable value of goods for excise duty calculation in a specific sale scenario.