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2002 (12) TMI 132 - AT - Central Excise
Issues:
1. Inclusion of transportation charges in the assessable value of goods supplied by the appellant. 2. Determination of the place of delivery of goods for assessing liability. Analysis: 1. The main issue in this case is whether the appellant is liable to include transportation charges in the assessable value of goods supplied. The appellant, a manufacturer of telephones and accessories, argued that sales are completed at the factory gate, and once goods are delivered to the transporter, the appellant has no control over the goods. The Department contended that since the appellant insures the goods during transit, transportation charges should be included in the assessable value. The Commissioner found that the title to the goods passed to the buyer only at the buyer's premises, not at the factory gate. 2. The debate focused on the determination of the place of delivery of goods. The appellant cited the Supreme Court case of Escorts JCB Ltd., emphasizing that ownership of goods passes to the buyer when handed over to the transporter at the factory gate. Additionally, a CEGAT decision in Associated Strips Ltd. v. CCE, New Delhi, supported the view that the sale of goods occurs at the factory gate, not at the buyer's premises. The Tribunal agreed with this interpretation, stating that ownership transfers to the buyer when goods are handed over to the transporter, and thus, freight and transit insurance should not be included in the assessable value of goods. 3. The Department justified its position by referring to a previous Tribunal order, which was later reversed by the Supreme Court. The Tribunal, considering the Supreme Court's decision and the ownership transfer point, accepted the appellant's argument. Consequently, the appeal was allowed, granting the appellant consequential relief. The judgment clarified that ownership of goods passes to the buyer at the factory gate, not at the buyer's premises, impacting the inclusion of transportation charges in the assessable value.
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