1996 (10) TMI 290 - AT - Central Excise

Summary

Issues:
Quantum of freight charges abatement for assessable value calculation.

Analysis:
The appeal concerns the abatement of freight charges to determine the assessable value of goods. The appellant argued for an abatement of 20 paise per Rs 100 due to additional insurance expenses incurred. Citing legal precedents, the appellant contended that insurance costs should be excluded from the assessable value, similar to delivery and collection charges. The appellant emphasized that the premium paid for insurance should be considered in determining the abatement amount. However, the respondent asserted that the appellant failed to provide a basis for claiming the higher abatement rate, alleging suppression of facts and invoking a longer period of limitation.

The Tribunal deliberated on the abatement of insurance charges, noting that transportation charges include insurance costs and must be excluded. It was established that the actual premium paid for insurance could be abated, but expenses related to internal insurance processing within the factory were not abatable. The Tribunal clarified that only expenses directly linked to transporting goods from the factory, such as insurance premiums, were eligible for abatement. Rejecting the appellant's claim for abatement of processing costs and interest, the Tribunal emphasized that only duty and transportation charges were abatable under Section 4(4) of the CESA, 1944.

Regarding the limitation issue, the Tribunal found that the appellant did not disclose the actual premium paid for insurance, despite claiming a higher abatement rate. This lack of transparency led to the conclusion that the appellant withheld information to evade duty, justifying the correct invocation of a longer period of limitation. Consequently, the Tribunal dismissed the appeal, upholding the decision to apply the longer limitation period due to the appellant's failure to provide necessary details for the abatement calculation.