2017 (7) TMI 1264 - HC - Central Excise

Substantial question of law - sale of cement - includibility of freight charges in assessable value - place of removal of goods - Section 35 G of the Central Excise Act, 1944 - Held that - The Tribunal categorically found that the purchase orders showed that the supply of cement is at the premises of the customers. This means that the supply has to be effected by making delivery of the goods in the premises of the customer to conclude the sale of goods. That position notwithstanding, the Tribunal further noted that the freight is arranged and paid by the Assessee. The Tribunal also noticed that the freight charges are treated as integral part of the price of the goods. With these materials the Tribunal held, on facts, that the place of removal of goods cannot be treated as the factory gate of the Assessee but the delivery point, which is the door or premises of the customer. Even if no reference was made by the Tribunal to the precedents referred to in para 3 of the impugned order, the conclusion could not have been otherwise - there is no question of fact or of law, much less a substantial question of law for the purpose of Section 35G of the Act - appeal dismissed - decided against Revenue.

Summary

Issues:
Interpretation of Section 35 G of the Central Excise Act, 1944 in relation to the place of removal of goods for tax purposes.

Analysis:
The judgment involves an appeal under Section 35 G of the Central Excise Act, 1944, where the appellant-Revenue challenges the decision regarding the place of removal of goods for tax assessment. The respondent, a cement manufacturer, delivered goods to customers at their premises, with freight arranged and paid by the Assessee. The Tribunal determined that the place of removal of goods was the customer's premises, not the factory gate of the Assessee, based on the integral nature of freight charges to the price of goods. The Court acknowledged the Tribunal's findings and concluded that no substantial question of law arose under Section 35 G for the Revenue's favor, as the factual situation supported the Tribunal's decision. Therefore, the appeal was dismissed.

This judgment primarily focuses on the interpretation of Section 35 G of the Central Excise Act, 1944 concerning the determination of the place of removal of goods for tax assessment purposes. The Court considered the factual findings of the Tribunal, which established that the delivery of cement to customers' premises, with freight charges forming an integral part of the goods' price, constituted the place of removal. The Court emphasized that the Tribunal's decision was well-supported by the evidence on record, leading to the dismissal of the appeal. The judgment highlights the importance of factual determinations in tax matters and the limited scope for challenging such findings under Section 35 G of the Act.

In this case, the Court's analysis revolved around the significance of the place of removal of goods in the context of tax assessment under the Central Excise Act, 1944. The Tribunal's observation that the delivery point at the customer's premises, where freight charges were included in the goods' price, constituted the place of removal was crucial in determining the tax liability. The Court's decision to dismiss the appeal was based on the lack of any substantial question of law favoring the Revenue, given the factual findings and the integral nature of freight charges to the goods' price. This judgment underscores the importance of factual assessments and their impact on tax assessments under relevant statutory provisions.