2017 (8) TMI 1102 - AT - Central Excise

Valuation - includibility - various items of expenditure had been incurred for delivery of the goods in addition to freight - Held that - the appeals filed by M/s. SPIC Ltd. against the order passed by the lower authority for an earlier period had come up before this Tribunal in the case of SPIC LTD. Versus. COMMISSIONER OF C. EX. CHENNAI 2006 (10) TMI 54 - CESTAT CHENNAI where it was held that As per Section 4(2) of the Act it the price of goods for delivery at the place of removal is not known and the value thereof is determined with reference to the price for delivery at a place other than the place of removal the cost of transportation from the place of removal to the place of delivery shall be deducted from such price - demand upheld - appeal dismissed - decided against appellant.

Summary

Issues:
- Determination of assessable value for excisable goods cleared from a depot
- Inclusion of transportation cost in the assessable value
- Application of Section 4(2) of the Act
- Consideration of expenses incurred in the value of goods
- Interpretation of relevant case law and legal provisions

Analysis:

Issue 1: Determination of assessable value for excisable goods cleared from a depot
The case involved M/s SPIC Ltd, engaged in the sale of Caustic Soda Lye (CSL) to M/s Nalco from a depot at Chennai harbour. The dispute arose regarding the assessable value of goods cleared from the depot, leading to demand notices for short-paid duty. The Assistant Commissioner determined the assessable value by deducting the cost of transportation from the sale price for delivery at a place other than the depot, following Section 4(2) of the Act. The Tribunal upheld the demand, emphasizing that the depot was the place of removal, and the assessable value should be based on the price at the depot.

Issue 2: Inclusion of transportation cost in the assessable value
The Tribunal considered the deduction of transportation cost from the price for delivery at the port of discharge, as per Section 4(2) of the Act. The lower authorities correctly applied these provisions by deducting the freight from the sale price for delivery at the port of discharge. The Tribunal found that the correctness of these figures was not disputed by the assessee, supporting the inclusion of transportation cost in the assessable value.

Issue 3: Application of Section 4(2) of the Act
The Tribunal referred to Section 4(2) of the Act, which mandates deducting the cost of transportation from the price for delivery at a place other than the place of removal when determining the assessable value. In this case, the cost of transportation had to be deducted from the price for delivery at the port of discharge, Vizakhapatnam, as it was the actual place of removal.

Issue 4: Consideration of expenses incurred in the value of goods
The Tribunal cited the judgment in the case of Union of India Vs Bombay Tyres International, highlighting that expenses contributing to the value of goods up to the date of sale should be included in the assessable value. Expenses like storage charges, handling charges, and after-sales services cannot be deducted. The Tribunal rejected the argument that certain expenses were not includible, stating that these expenses enhance the marketability of the goods and should be considered in the value.

Issue 5: Interpretation of relevant case law and legal provisions
The Tribunal analyzed the case law cited by the appellant and emphasized that the goods were delivered from the depot to the buyer under specific invoices. The Tribunal clarified that the assessable value should be determined based on the price at the actual place of removal, which, in this case, was the harbour depot. Additionally, the Tribunal rejected the appellant's argument regarding the inclusion of certain expenses in the assessable value, aligning with the legal provisions and previous judgments.

In conclusion, the Tribunal upheld the impugned order based on the precedent set in a previous case involving the same appellant. The decision was in accordance with the law, and the appeals were dismissed, maintaining the determination of the assessable value for excisable goods cleared from the depot.