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2015 (10) TMI 1226 - AT - Central ExciseValuation - Payment of duty on dutiable and exempted final product - whether the transportation charges and loading/unloading charges would be included in the price of exempted goods for payment of 8% of the amount under Rule 6 of the CENVAT Credit Rules, 2004 - Held that - Tribunal in the case of Areva T&D India Ltd (2009 (7) TMI 1127 - CESTAT CHENNAI) held that freight and insurance charges do not form part of the assessable value for the purpose of payment of 8% amount in terms of Rule 6(3) of the said Rules, 2004. The Rule was amended on 01.04.2008. On a query from the Bench, the learned Advocate submits that the present case relates to prior to 01.04.2008. The learned Authorised Representative for the Revenue relied upon the decision of the Tribunal in the case of Timex Watches Ltd Vs CCE Noida - 2004 (8) TMI 204 - CESTAT, NEW DELHI . We find that the Tribunal in the case of Areva T&D India Ltd had analised this issue in detail - demand of duty alongwith interest and penalty cannot be sustained. Accordingly, the impugned order is set aside - Decided in favour of assessee.
Issues: Whether transportation charges and loading/unloading charges should be included in the price of exempted goods for payment under Rule 6 of the CENVAT Credit Rules, 2004.
Analysis: The Appellants, engaged in manufacturing Cement and Clinkers, were availing CENVAT Credit benefits and paying duty on dutiable and exempted final products. The central issue revolved around the inclusion of transportation and loading/unloading charges in the price of exempted goods for the purpose of payment under Rule 6 of the CENVAT Credit Rules, 2004. The Tribunal referred to various precedents such as Koya & Co. Construction Pvt Ltd Vs CCE Hyderabad-III, CCE Hyderabad Vs Koya & Co. Construction Pvt Ltd, and Areva T&D India Ltd Vs CCE LTU Chennai to address this issue. Notably, the Tribunal in the case of Areva T&D India Ltd held that freight and insurance charges do not constitute part of the assessable value for payment under Rule 6(3) of the Rules. The Rule was amended on 01.04.2008, and the present case pertained to a period before this amendment. The Tribunal further discussed the case of Timex Watches Ltd Vs CCE Noida and emphasized the analysis conducted in the Areva T&D India Ltd case. The Tribunal delved into the specifics of the department's argument against the assessees, focusing on the period from Feb-06 to June-06. The contention was whether Rule 6(3) of the CENVAT Credit Rules, 2004 mandated a manufacturer of both dutiable and exempted goods, not maintaining separate accounts, to pay an amount equal to 10% of the value of exempted final products. The Tribunal highlighted the decision in CCE, Hyderabad v. Koya & Co. Construction Pvt. Ltd., rendered prior to the amendment of Rule 6(3) of the CCR, 2004. This decision upheld that certain elements like transportation costs, laying, jointing, testing, and commissioning should not be considered as part of the price of goods at the factory gate. Following this reasoning, the Tribunal set aside the impugned order, asserting that freight and insurance charges should not be included in the assessable value for the purpose of payment under Rule 6(3). Consequently, the Tribunal concluded that the demand for duty, interest, and penalty could not be upheld. Therefore, the impugned order was set aside, and the appeal filed by the Appellant was allowed, providing a favorable judgment in this case.
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