2024 (9) TMI 1073 - AT - Central Excise

Valuation of Excise Duty - whether the freight and/or insurance charge is includible in the assessable value of excisable goods in the fact that the sale of the goods is on ex-factory basis? - HELD THAT - The issue involved in the present case is no longer res-integra as the same has been decided for the earlier period in the appellant s own case on the same nature of transaction of excisable goods. The Tribunal in 2024 (5) TMI 194 - CESTAT AHMEDABAD held that ' freight and/or insurance is not includable in the assessable value. Consequently, demand of duty on this count is not sustainable.' In view of the above decision of the Tribunal in the appellant s own case, the demand in the present case is not sustainable. Hence, the impugned order is set aside - appeal allowed.

Issues Involved:
1. Whether freight and/or insurance charges are includible in the assessable value of excisable goods when the sale is on an ex-factory basis.

Detailed Analysis:

Issue 1: Inclusion of Freight and/or Insurance Charges in Assessable Value

Background:
The central issue in this case is whether the freight and/or insurance charges are includible in the assessable value of excisable goods when the sale is conducted on an ex-factory basis. The appellant argued that this matter has already been decided in their favor in a previous Tribunal decision (Final Order No.10989-10990/2024 dated 02.05.2024), and thus, the current impugned order should be set aside.

Tribunal's Observation:
The Tribunal referred to its earlier decision, which was based on the case of Gujarat Fluorochemicals Ltd. The Tribunal had observed that when the sale is on an ex-factory basis and freight and/or insurance charges are shown separately in the invoice, these charges are not includible in the assessable value. This decision relied heavily on the Supreme Court's judgment in the case of Commissioner of Customs & Central Excise vs. Ispat Industries Limited, which clarified that the place of removal should be determined based on the facts of each case and that the payment of insurance or freight charges alone cannot determine the place of removal.

Key Judgments Referenced:
1. Gujarat Fluorochemicals Ltd.: The Tribunal held that freight and/or insurance charges shown separately in the invoice are not includible in the assessable value if the sale is on an ex-factory basis.
2. Commissioner of Customs & Central Excise vs. Ispat Industries Limited: The Supreme Court clarified that the place of removal is to be determined on a case-by-case basis and that insurance or freight charges alone cannot determine it.
3. Savita Oil Technologies Ltd.: The Tribunal reiterated that the factory gate is the place of removal, and merely delivering goods to the buyer's premises does not extend the place of removal to the buyer's premises.
4. VIP Industries Ltd. vs. Commissioner of Customs & Central Excise: The Supreme Court held that freight and insurance charges for delivery to customers from the depot are not includible in the assessable value.

Tribunal's Conclusion:
The Tribunal concluded that the issue is no longer res-integra, meaning it has already been settled by judicial precedent. The freight and/or insurance charges cannot be included in the assessable value of the excisable goods when the sale is on an ex-factory basis. Consequently, the demand for duty on these charges is not sustainable. The impugned order was set aside, and the appeal was allowed with consequential relief.

Final Order:
The Tribunal set aside the impugned order and allowed the appeal, stating that the freight and/or insurance charges are not includible in the assessable value of excisable goods when sold on an ex-factory basis. The decision was pronounced in open court on 13.09.2024.

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