2024 (6) TMI 616 - AT - Central Excise

Levy of Central Excise Duty - transportation of goods from the place of removal till the customer s place - HELD THAT - The said issue has been examined by this Tribunal in the appellant s own case M/S. HINDALCO INDUSTRIES LTD. VERSUS COMMR. OF CENTRAL EXCISE, KOLKATA-II 2023 (11) TMI 1253 - CESTAT KOLKATA , wherein this Tribunal has observed ' When the goods were handed over to the transporter, the respondent had no right to the disposal of the goods nor did it reserve such rights inasmuch as title had already passed to its customer.' As the issue has already been settled in the appellant s own case when the goods are cleared at factory gate, the transportation charges recovered from the customers for transportation of goods to the customer s place is not includible in the assessable value of the goods. Therefore, the appellant is not liable to pay the duty on the transportation charges. The appellant is not liable to pay duty. As no duty is payable by the appellant, no penalty is imposed against the appellant. The impugned order is set aside - appeal allowed.

Summary

Issues involved: Challenge to demand of Excise duty for transportation of goods from place of removal to customer's place.

Summary:
The appellant, engaged in manufacturing roll products of aluminium, challenged the demand of Excise duty for the period October 2007 to March 2009 on transportation of goods to customer's place. The dispute arose from the appellant charging a standard amount of freight from customers for arranging transport of goods, which was separately disclosed on the invoice. The appellant paid excise duty on all goods cleared from the factory gate and on the transaction value after deducting the standard freight amount. A show-cause notice alleged under-valuation of goods and demanding differential Excise duty along with interest. The appellant contested the notice, but the demand was confirmed by the adjudicating authority and the Commissioner (Appeals).

The main contention was whether transportation charges for goods from factory gate to customer's place are includible in the assessable value of goods for Excise duty purposes. The appellant relied on a previous Tribunal judgment stating that such charges are not includible. The Tribunal, referring to a Supreme Court judgment, held that when goods are cleared at the factory gate, transportation charges recovered from customers are not includible in the assessable value of goods. Consequently, the appellant was not liable to pay duty or penalty. The impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal ruled in favor of the appellant, stating that transportation charges for goods from the factory gate to the customer's place are not includible in the assessable value for Excise duty, thereby relieving the appellant from duty payment and penalties.