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2019 (7) TMI 251 - AT - Central ExciseValuation - inclusion of cost of transportation from factory to depot in assessable value - place of removal - section 4(3)(c) of Central Excise Act - changes in the definition of place of removal during the relevant period in dispute - HELD THAT - The issue has been settled in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI 2006 (9) TMI 181 - SUPREME COURT where it was held that The bills of lading show that the port of discharge was Mumbai Port/JNPT/Dharamtar. In the bill of entry, the FOB price, freight and insurance were shown separately in U.S. dollars. Since Dharamtar was also shown as the port of discharge, the freight charges paid by the buyer to the shippers included the charges for freight not only upto BFL but also to Dharamtar. Appeal allowed - decided in favor of appellant.
Issues Involved:
- Incorrect determination of assessable value of transferred goods - Alleged short payment of excise duty - Applicability of transportation cost in assessable value - Interpretation of the definition of "place of removal" - Conflict between Central Excise Valuation Rules and provisions of the Act Analysis: 1. Incorrect determination of assessable value of transferred goods: The case involved a dispute regarding the assessable value of excisable goods transferred to depots during a specific period. The appellant argued that the transportation cost from the factory to the depot should not be included in the assessable value. The initial demand for duty recovery, interest, and penalty was based on the alleged incorrect determination of the assessable value. 2. Alleged short payment of excise duty: The show cause notice issued to the appellant claimed a short payment of excise duty amounting to a specific sum. The demand was confirmed upon adjudication, leading to the appellant filing an appeal against the order. 3. Applicability of transportation cost in assessable value: The appellant contended that the transportation cost from the factory to the depot should not be added to the assessable value based on the definition of "place of removal" during the relevant period. The argument centered on the understanding that the depot was not considered a place of removal during that time. 4. Interpretation of the definition of "place of removal": The Tribunal analyzed the definition of "place of removal" during the disputed period and highlighted that it included only the factory or premises of production, manufacture of excisable goods, or warehouses where goods were deposited without duty payment. The absence of depots from this definition was crucial in determining the assessable value. 5. Conflict between Central Excise Valuation Rules and provisions of the Act: The Tribunal emphasized that in case of a conflict between rules made under delegated legislative power and the provisions of the Act, the latter prevails. By referencing previous judgments and legal principles, the Tribunal concluded that the transportation cost from the factory to the depot should not be included in the assessable value based on the specific definition of "place of removal" applicable during the relevant period. In conclusion, the Tribunal set aside the impugned order and allowed the appeal, providing consequential relief as per the law. The judgment established the correct interpretation of the definition of "place of removal" and clarified the exclusion of transportation costs in the assessable value of excisable goods during the relevant period.
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