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2018 (2) TMI 1489 - AT - Central ExciseValuation - deduction of freight and insurance on average basis - place of removal - Held that - at the material time depot was not included in the definition of place of removal, consequently, duty was required to be paid on the value at the factory gate. In these circumstances, cost of transportation and transit insurance cannot be included in the assessable value as a matter of principle - reliance placed in the case of UNION OF INDIA & ORS. ETC., ETC. Versus BOMBAY TYRE INTERNATIONAL LTD. ETC., ETC. 1983 (10) TMI 51 - SUPREME COURT OF INDIA - decided in favor of appellant. Demand on the ground of change in rate of duty - Held that - on this issue, the impugned order does not give any findings - impugned order is set aside in respect of second issue and the matter is remanded to the Commissioner (Appeals) to give findings - matter on remand. Appeal allowed in part and part matter on remand.
Issues: Appeal against denial of deduction of freight and insurance on an average basis.
Analysis: 1. Deduction of Freight and Insurance: The appellant, a manufacturer of excisable goods, appealed against the denial of deduction of average freight and insurance on goods cleared from their depots. The appellant argued that at the material time, the definition of the place of removal did not include depots. Therefore, the assessable value for clearances to different depots varied due to different selling prices. The appellant contended that the denial of the deduction was unjustified, especially concerning the change in the rate of duty during a provisional assessment. The tribunal found that the exclusion of the value of freight and insurance incurred beyond the place of removal was permissible, citing the decision in Bombay Tyre International Ltd. The tribunal allowed the appeal regarding the admissibility of the deduction of average freight and transit insurance. 2. Interpretation of Precedents: The appellant relied on legal precedents, including the decision in Bombay Tyre International Ltd. and cases cited by the tribunal and the Hon'ble Apex Court. The tribunal clarified that maintaining the wholesale cash price the same at the factory gate and depot was not a mandatory requirement for excluding the value of freight and insurance from the sale price at the depot. The tribunal emphasized that the assessable value could differ based on regions with varying sales tax rates, as recognized in the case of Videocon Industries Ltd. The tribunal's analysis highlighted the misinterpretation of legal principles by the lower authorities and affirmed the appellant's right to claim the deduction of average freight and transit insurance. 3. Remand for Further Findings: Regarding the second issue related to the admissibility of the deduction of actual excise duty paid, the tribunal noted that the impugned order lacked findings. Consequently, the tribunal set aside the order on this issue and remanded the matter to the Commissioner (Appeals) for further determination. The tribunal partially allowed the appeal, directing a review of the issue concerning the admissibility of the deduction of actual excise duty paid. In conclusion, the appellate tribunal in CESTAT Mumbai's judgment addressed the denial of deduction of freight and insurance on an average basis, emphasizing legal interpretations, precedents, and the need for a comprehensive assessment of the issues involved. The tribunal's decision provided clarity on the admissibility of such deductions and highlighted the importance of proper findings in legal proceedings for a fair and just resolution.
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