2017 (8) TMI 996 - AT - Central Excise

Valuation - job-worker - deduction claimed in respect of outward transportation charges freight and hundi discount given to the principal manufacturer - includibility - Whether the outward transportation charges are required to be included in the assessable value of the goods cleared by the appellant as job worker or not? - Held that - Admittedly, the outward freight charges have been paid on the goods after the goods have been cleared from their factory - in view of the decision of the Hon ble Supreme Court in the case of Ujagar Prints, we hold that outward freight includible in the assessable value in the facts and circumstances of the case - demand set aside. Whether hundi charges given to the principal manufacturer is admissible deduction to the appellant being job worker or not? - Held that - in an identical set of facts in the case of Indian Pistons Ltd. vs. CCE, Chennai 2007 (9) TMI 89 - CESTAT, CHENNAI , it was held that Since appellant is not involved in buyer s settings with bank, then interest paid by buyer to bank for delay in remittances are not includible in assessable value - the hundi charges are not included in the assessable value. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the outward transportation charges are required to be included in the assessable value of the goods cleared by the appellant as a job worker or not.
2. Whether the hundi discount given to the principal manufacturer is an admissible deduction to the appellant being a job worker or not.

Issue No.1:
The appellant, a job worker converting scrap into steel flats bars for M/s. Tata Motors Limited, claimed deductions for outward transportation charges incurred for delivering goods to Tata's premises. The Revenue contended that these charges should be included in the assessable value of the goods. Referring to the decision in the case of Ujagar Prints, the Tribunal held that outward freight charges paid after goods clearance are includible in the assessable value. Thus, the demand on this account was set aside.

Issue No.2:
In a similar context, the Tribunal cited the case of Indian Pistons Ltd. Vs. CCE, Chennai, where a discount was given by the buyer to their bankers for prompt payment, which was not to be included in the assessable value. The Tribunal emphasized that the appellant, in this case, was only concerned with prompt payment by the buyer and had no involvement in the financial arrangement between the buyer and the bank. Thus, the hundi charges were not to be included in the assessable value, and the demand was set aside. The impugned orders were set aside, and the appeals were allowed with consequential relief.

This judgment delves into the issues of including outward transportation charges and hundi discount in the assessable value of goods cleared by a job worker. Through detailed analysis and reference to legal precedents, the Tribunal clarified that outward freight charges post-clearance are to be included in the assessable value, while hundi charges unrelated to the job worker's financial arrangements need not be included. The decision was based on the specific circumstances of the case and relevant legal principles, resulting in the setting aside of the demands and allowing the appeals with consequential relief.