2000 (5) TMI 63 - AT - Central Excise

Summary

Issues Involved:
The issue for consideration is the determination of the "place of removal" under Section 4(4)(b)(iii) of the Central Excises Act, 1944, when the ownership of excisable goods remains with the manufacturer until delivery to the buyer.

Summary:
In the case before the Appellate Tribunal CEGAT, the matter involved a reference to the Larger Bench to reconsider the interpretation of the "place of removal" under Section 4(4)(b)(iii) of the Act. The Tribunal had previously held that when the manufacturer retains ownership of goods until delivery to the buyer's destination, the place of removal is considered to be the buyer's premises.

During the hearing, arguments were presented regarding the interpretation of the law and the relevance of ownership in determining the place of removal. The Tribunal examined the relevant amendments in Section 4 of the Act, particularly after the insertion of Clause (iii) specifying the place of removal as "a depot, premises of a consignment agent, or any other place from where the excisable goods are to be sold after clearance from the factory."

The Tribunal clarified that the expression "from where such goods are removed" merely completes the definition of the place of removal and does not alter the existing provisions. It emphasized that the sale price at the specified place of removal determines the assessable value for excise duty levy.

Based on the facts of the case involving M/s. Prabhat Zarda Factory Ltd., where the goods were delivered to buyers from transport agency godowns, the Tribunal concluded that the place of removal is where the transfer of possession occurs, even if ownership remains with the manufacturer until delivery. The Tribunal upheld the decision in the case of M/s. Escorts J.C.B. Ltd. as correctly interpreting the law on this matter.

Regarding penalties imposed in the appeals, the Tribunal remanded the issue to the respective Commissioners of Central Excise for reconsideration in the interest of justice.

In conclusion, the Tribunal clarified the interpretation of the "place of removal" under Section 4(4)(b)(iii) and provided guidance on determining assessable value for excisable goods based on the sale price at the place of removal.