2019 (4) TMI 2091 - AT - Central Excise

Valuation of gas - inclusion of retention charges of Cylinders wherein the final product viz gas supplied to the Customer beyond the stipulated period in the assessable value of the gas or not - HELD THAT - The retention/detention charges is not a part of the sale price. It is only charged when the customers retain/detain the cylinders beyond the period stipulated by the appellant. Accordingly, the retention/detention charges are not includable in the transaction value of the excisable goods namely gas sold, duly packed, in the gas cylinders. Reliance can be placed in the case of COMMISSIONER OF CENTRAL EXCISE, INDORE VERSUS M/S GRASIM INDUSTRIES LTD. THROUGH ITS SECRETARY 2018 (5) TMI 915 - SUPREME COURT where it was held that retention/detention charges recovered by the appellant beyond the stipulated time period should not be included in the assessable value. Appeal allowed.

Summary

Issues involved: Whether retention/detention charges recovered beyond stipulated time period should be included in transaction value of gas sold in packed cylinders.

Analysis:
The appellant raised the issue of inclusion of retention/detention charges in the transaction value of gas sold in packed cylinders. The appellant's counsel referred to several judgments, including those of BOC India Ltd., Govind Poy Oxygen Ltd., Inox Air Products Ltd., Indian Air Gases Ltd., Goyal M.G. Gases P. Ltd., and Grasim Industries Ltd., to support their argument. The appellant's counsel specifically highlighted the decision of a five-judge bench of the Supreme Court in the case of Grasim Industries Ltd. 2018 (360) ELT 769 (SC), which had settled the same issue.

The Joint Commissioner (AR) representing the Revenue reiterated the findings of the impugned order during the proceedings. After hearing both sides and examining the records, the Hon'ble Members (Judicial and Technical) of the Appellate Tribunal observed that the issue was no longer res integra in light of the various judgments cited by the appellant's counsel. The Tribunal held that retention/detention charges are not part of the sale price but are only levied when customers retain or detain the cylinders beyond the stipulated period. Consequently, the retention/detention charges should not be included in the transaction value of the excisable goods, specifically gas sold in packed cylinders. Relying on the precedent set by the judgments, the impugned order was set aside, and the appeals were allowed.

The judgment was dictated and pronounced in open court, providing a clear resolution to the issue raised by the appellant regarding the inclusion of retention/detention charges in the transaction value of gas sold in packed cylinders.