2002 (5) TMI 82 - AT - Central Excise

Summary

Issues involved:
Inclusion of freight and insurance charges in the assessable value of cylinders manufactured and supplied by M/s. JBM Industries Ltd.

Detailed Analysis:

Issue 1: Inclusion of freight and insurance charges in the assessable value
The Appellate Tribunal considered the submissions made by both sides regarding the inclusion of freight and insurance charges in the assessable value of cylinders supplied by M/s. JBM Industries Ltd. The Appellants argued that the sale took place at the factory gate, and therefore, the freight and insurance charges should not be included in the assessable value. They cited a previous decision by the Tribunal in a similar case where it was held that the goods were delivered to the buyers when handed over to the transporter. The Revenue, on the other hand, contended that the insurance policy taken by the Appellants indicated their ownership of the goods during transportation. They also mentioned a previous decision where the differential duty was held payable in the Appellants' case.

Issue 2: Interpretation of "place of removal" under Section 4 of the Central Excise Act
The Tribunal analyzed Section 4(1) and 4(4)(b) of the Central Excise Act to determine the concept of "place of removal" in the context of the case. It was noted that the LPG cylinders were sold by the Appellants in accordance with specific contracts with oil companies, and the cylinders were cleared from the factory premises under the purchaser's name. The Tribunal emphasized the importance of the terms of the contract in establishing the place of removal. A comparison was drawn with a previous case where the facts differed significantly, highlighting the specific contractual arrangements in the present matter. The Tribunal also distinguished previous decisions and concluded that the sale of goods had taken place at the factory gate, not at the buyers' premises as contended by the Revenue.

Conclusion:
The Tribunal, based on the analysis of the relevant provisions of the Central Excise Act and the specific terms of the contract between M/s. JBM Industries Ltd. and the oil companies, held that the freight and insurance charges should not be included in the assessable value of the cylinders. The decision was supported by the distinction made from previous cases and the specific contractual arrangements in the present matter, leading to the conclusion that the place of removal was the factory of the Appellants. As a result, all the appeals of the Appellants were allowed by the Tribunal.