2013 (11) TMI 1124 - AT - Central Excise

Duty on delivery charges Held that - Following HPCL Vs. Commissioner 2012 (12) TMI 471 - CESTAT, Bangalore The delivery charges from the Bottling Plants to the dealers premises represents the cost of transportation from the Bottling Plants to the dealers premises - Even though this cost may not be equal to the actual, it cannot be included in the assessable value as transportation is entirely different activity from manufacture - the delivery charges should not be included for the purpose of Central Excise duty order set aside Decided in favour of Assessee.

Summary

Issues:
1. Waiver of predeposit and stay of recovery against adjudged dues.
2. Inclusion of delivery charges in the assessable value of LPG.
3. Valuation issue concerning the abatement of freight charges.

Analysis:
1. The judgment deals with applications seeking waiver of predeposit and stay of recovery against adjudged dues, including duty demands for specific periods and connected penalties under challenge in first and second appeals. The Tribunal found a prima facie case for the appellant and dispensed with pre-deposit. The substantive issue was deemed settled by a previous decision of the Bench affirmed by the apex court, leading to the disposal of the appeals at this stage.

2. The case involved the appellant, engaged in manufacturing petroleum products, and their bonded warehouse where they stored imported and indigenous LPG. The Department issued show-cause notices alleging that delivery charges collected by HPCL for bottled LPG delivery to distributors should be included in the assessable value of bulk LPG cleared from the warehouse. The adjudicating authority confirmed duty demands against the appellant, which were contested in the present appeals directed at the orders passed by the Commissioner of Central Excise.

3. The valuation issue centered around the abatement of freight charges claimed by HPCL for determining the assessable value of LPG. The adjudicating authority found discrepancies between actual freight incurred and claimed freight, holding that only actual freight shown separately in the invoice could be abated. The Tribunal, after considering a previous decision in a similar case, held that delivery charges should not be included in the assessable value for Central Excise duty purposes. A Civil Appeal filed by the Department against the Tribunal's decision was dismissed by the Supreme Court, confirming the issue's settlement against the Revenue. Consequently, the Tribunal set aside the demands of duty and connected penalties, allowing the appeals and disposing of the stay applications.