1979 (12) TMI 65 - CGOVT - Central Excise

Summary

Issues:
1. Interpretation of Notification No. 120/75 regarding the assessable value for goods classified under Item 68 of the Central Excise Tariff.
2. Whether post-manufacturing charges like freight and insurance should be included in the assessable value.
3. Application of Sec. 4 of the Central Excises and Salt Act in determining the assessable value.
4. Compliance with the provisions of Notification No. 120/75 in relation to the invoice value.

Analysis:

1. The judgment delves into the interpretation of Notification No. 120/75 concerning the assessable value for goods classified under Item 68 of the Central Excise Tariff. The petitioners had opted for the benefit of this notification, which provided an exemption from duty under certain conditions. The issue arose when the petitioners included elements like excise duty, local taxes, freight, and insurance in their invoices, leading to a dispute over the assessable value calculation.

2. The petitioners argued that post-manufacturing charges such as freight and insurance should not be included in the assessable value, even if shown separately in the invoice. They contended that these charges were distinct from the value of the goods and should be excluded based on the provisions of Sec. 4 of the Central Excises and Salt Act and relevant case laws cited in support of their position.

3. The Government agreed with the petitioners' interpretation, stating that the reference to the invoice value in Notification No. 120/75 pertained to the value exclusive of freight and insurance. Since the invoice clearly showed the value exclusive of these charges separately, there was no justification for adding freight and insurance to the assessable value, as they were not part of the core value of the goods.

4. The judgment emphasized that in cases where the value exclusive of duty, sales tax, freight, and insurance is already separately shown in the invoice, there should be no inclusion of freight and insurance in the assessable value. The court concluded that the petitioners' approach aligned with the requirements of Notification No. 120/75 and the assessable value calculation, thereby allowing the revision application in favor of the petitioners.

In conclusion, the judgment clarifies the scope of assessable value calculation under Notification No. 120/75, highlighting the exclusion of post-manufacturing charges like freight and insurance from the value of goods for excise duty purposes. The decision underscores the importance of adhering to statutory provisions and relevant notifications in determining the assessable value of goods under the Central Excise Tariff.