2023 (9) TMI 10 - AT - Central Excise

Valuation - inclusion in the assessable value or not - forwarding and freight charges collected by the appellant from their customers while clearing/selling excisable goods on payment of duty - interpretation of provision of Section 4 of Central Excise Act - HELD THAT - The issue on merit is whether the forwarding and freight charges collected by the appellant from their customer should be included in transaction value for the purpose of charging excise duty - In an identical issue in the appellant own case earlier has come up before this Tribunal in TRANSASIA BIO-MEDICALS LTD. VERSUS COMMISSIONER OF C. EX., DAMAN 2012 (1) TMI 123 - CESTAT AHMEDABAD wherein this Tribunal has set aside the demand on the ground of time bar. In the present case also somewhat the identical issue involve i.e. duty liability on forwarding and freight charges collected from the customer. In the present case the Show cause notice was issued subsequent to the period involved in the aforesaid tribunal decision. In these facts, as per the law settled by the Hon ble Supreme Court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP 2006 (4) TMI 127 - SUPREME COURT the demand for the subsequent period will not sustain on the ground of time bar. Allegation of suppression of facts against the appellant cannot be sustained. When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. The demand in the present case also is hopelessly time barred. Accordingly, the demand is set aside on the ground of limitation itself. The impugned order is set aside. Appeal is allowed.

Summary

Issues involved:
The issue involved is whether the appellant is liable to pay duty on forwarding and freight charges collected from customers while selling excisable goods, and whether these charges should be included in the assessable value for charging excise duty.

Details of the judgment:

Limitation Grounds:
The appellant argued that the demand is under an extended period and should be set aside due to limitation. They contended that there was no suppression of facts as they regularly filed ST-3 returns with details of clearances. Referring to a previous Tribunal decision in the appellant's own case, it was highlighted that the extended period cannot be invoked for subsequent periods based on the Supreme Court judgment in the case of Nizam Sugar Factory.

Merits of the Case:
The Tribunal considered whether the forwarding and freight charges should be included in the transaction value for charging excise duty. Citing relevant provisions and rules, the Tribunal examined the issue and referred to past judgments in support of the appellant's arguments. It was noted that the demand related to freight charges was previously set aside in the appellant's own case due to being time-barred.

Legal Precedents:
The Tribunal referenced the Hon'ble Supreme Court judgment in the case of Nizam Sugar Factory, emphasizing that if a show cause notice has been issued for an earlier period based on the same set of facts, another notice for a subsequent period invoking the extended period of limitation cannot be sustained. The Tribunal concluded that there was no suppression of facts by the appellant, as all relevant information was known to the authorities when the first notice was issued.

Decision:
Based on the arguments presented and the legal precedents cited, the Tribunal set aside the demand on the ground of limitation itself. Consequently, the impugned order was set aside, and the appeal was allowed.

Conclusion:
The judgment focused on the interpretation of provisions related to excise duty on forwarding and freight charges, ultimately ruling in favor of the appellant based on the limitation grounds and legal principles established by previous decisions, including the Supreme Court's stance on suppression of facts in excise matters.