2014 (6) TMI 682 - AT - Central Excise

Valuation of goods - Deduction on account of transportation charges - Held that - period involved is from 1-7-2000 to 11-9-2000 and the show cause notice stand issued on 30-4-2002. The adjudicating authority has invoked the longer period of limitation by observing that in terms of Board s Circular No. 249/83/96-CX., dated 11-10-1996, invoices were not required to be submitted to the department and the assessee s failure to show transportation charges separately in the invoices came to the notice of the Revenue at the time of visit of the officers to their factory. We find no justification in the above reasoning of the adjudicating authority. If the invoices were not to be submitted to the Revenue, failure of the assessee not to file the same with the Revenue cannot be held to be any suppression of facts with any mala fide intent. If the assessee does not do what he is not required to do under the law, he cannot be charged with any suppression or misstatement - Demand barred by limitation - Decided in favour of assessee.

Summary

Issues:
- Dispute over deduction on transportation charges
- Validity of denial based on non-segregation of charges in invoices
- Application of longer period of limitation
- Justification of denial based on failure to show charges separately
- Admissibility of deduction as per legal provisions
- Bar on demand due to limitation period

Analysis:
1. The primary issue in the present appeal before the Appellate Tribunal CESTAT NEW DELHI was the dispute regarding the claim of deduction concerning transportation charges from the appellant's depot to the buyer's premises. The adjudicating authority denied the deduction, amounting to a duty demand of Rs. 4,57,600/-, and imposed a penalty on the same basis that the transportation charges were not shown separately in the invoices for the relevant period.

2. The Tribunal referred to the case of West Coast Paper Mills Ltd. v. CCE, Bangalore [2004 (172) E.L.T. 493 (Tri.-Bang.)] where it was held that the absence of separate disclosure of transportation charges in invoices does not negate the admissibility of such deductions if the law does not mandate charging duty on these charges. Following this precedent, the Tribunal found that the Commissioner's decision to deny the deduction based on the lack of segregation in the invoices was not sustainable.

3. Another crucial aspect addressed by the Tribunal was the invocation of the longer period of limitation by the adjudicating authority. The authority justified this action by citing a circular stating that invoices were not required to be submitted to the department. However, the Tribunal disagreed with this reasoning, emphasizing that the failure to show transportation charges separately in the invoices, when not mandated by law, did not constitute suppression of facts or mala fide intent. Consequently, the demand was deemed barred by limitation.

4. Ultimately, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellants. The decision was based on the findings that the denial of deduction on transportation charges due to non-segregation in the invoices was unfounded, and the demand was time-barred due to the absence of justification for invoking the longer limitation period.

This detailed analysis of the judgment highlights the key legal arguments, precedents, and reasoning employed by the Appellate Tribunal CESTAT NEW DELHI in resolving the issues raised in the appeal concerning transportation charges and the application of the limitation period.