2018 (2) TMI 559 - AT - Central Excise

Valuation - includibility - transportation charges - Held that - it is clear that Rule 5 of Valuation (Determination of Price of Excisable Goods) Rules, 2000 does not envisage the cost of transportation from the place of removal upto the place of delivery be included for determining the value - at the relevant time the cost of transportation which has been charged separately by debit note is not includable for the purpose of central excise duty - reliance placed in the case of CCE v. Accurate Meters Ltd. 2009 (3) TMI 1 - SUPREME COURT - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Inclusion of transportation charges in the assessable value for levy of excise duty.

Analysis:
The appellant, engaged in manufacturing plastic drums & barrels, collected transport charges by issuing debit notes for deliveries at customer premises. The department sought to include these transportation charges in the assessable value for excise duty levy. The appellant, aggrieved by this, filed an appeal against the order-in-appeal No. SB/04/TH-II/09 dated 18.06.2009.

Upon hearing both parties, the Tribunal examined Rule 5 of Valuation (Determination of Price of Excisable Goods) Rules, 2000. It was observed that the rule does not require the cost of transportation from the place of removal to the place of delivery to be included in determining the value of excisable goods. The rule specifies that if the cost of transportation is charged separately to the buyer in addition to the price of goods and shown separately in the invoice, it should be excluded from the transaction value.

The Tribunal, in line with the Supreme Court's decision in the case of CCE v. Accurate Meters Ltd. 2009 (235) ELT 581 (S.C.), held that the cost of transportation charged separately through debit notes is not includable for central excise duty purposes. Consequently, the impugned order was set aside, and the appeal was allowed. The Tribunal's decision was based on the clear interpretation of Rule 5 and the precedent set by the Supreme Court.

In conclusion, the Tribunal's ruling favored the appellant, emphasizing that the transportation charges, when separately charged and shown in the invoice, should not be considered for the purpose of central excise duty calculation. The decision provided clarity on the valuation rules concerning the inclusion of transportation costs in the assessable value for excise duty levy.