2009 (4) TMI 269 - AT - Central Excise

It is the case of the Department that the Respondents have wrongly included the costs of transportation and insurance in the assessable value and on such inflated value, they have paid higher duty. Consequently, the Respondents have taken higher refund amount under Notification No. 32/99-C.E., dated 8-7-1999 and their customers have also taken higher amount of credit against the impugned goods supplied by the Respondents. - customers place cannot be held to be a place of removal, as the goods are not removed from there but are delivered there - we hold that the Respondents are not entitled to include freight and insurance charges in the assessable value and the duty on the impugned goods requires to be re-calculated accordingly. The Respondents would be entitled to the refund of duty paid on such re-calculated value in terms of the Notification No. 32/99-C.E. and their customers would only be entitled to duty credit of that amount, provided it has been paid in cash, as stipulated under the said Notification. The Respondents are also entitled to refund of the excess duty paid on the remaining portion representing freight and insurance charges as such duty in the first place is not required to be paid by them. Their customers would also not be eligible for taking credit of that portion of the duty on freight and insurance charges paid by the Respondents. The appeals of the Department are allowed

Summary

The Appellate Tribunal CESTAT, KOLKATA, consisting of Shri S.S. Kang and Dr. C. Satapathy, heard Cross Objection No. E/CO/139/2005. The Department claimed that the Respondents inflated the assessable value by including transportation and insurance costs, resulting in higher duty payments and refunds. The Department argued that this caused losses to the exchequer and the Respondents' customers. The Respondents contended that they were entitled to include these costs under the amended valuation provision, as the goods were supplied on F.O.R. basis. After reviewing case laws, the Tribunal concluded that transportation and insurance charges cannot be included in the assessable value. They cited relevant decisions, including CCE, Noida v. Accurate Meters Ltd., to support their ruling. Consequently, the Respondents were not allowed to include these charges in the assessable value, and the duty on the goods was to be re-calculated. The Department's appeals were allowed, and the Respondents' cross-objection was dismissed. The operative part of the order was pronounced on 1-4-2009.