2014 (11) TMI 370 - AT - Central Excise

Valuation of goods - Inclusion of transportation charges in assessable value - Held that - Rule 5 of the Central Excise Valuation Rules, 2000 was amended by Notification No.11/2003-CE (NT) dt. 1.3.2003 and the condition of showing the transportation charges separately in the invoice have been withdrawn. We, further find that there is no allegation against the respondent that they have recovered the transportation charges over and above actually paid by them. It is the contention of the respondent that goods have been sold at their factory gate and whatever the transportation charges paid by them on behalf of the buyers have been charged through debit note. Therefore, we do not find any infirmity in the impugned order. In these circumstances, we hold that the transportation charges collected by the respondents are not includible in the assessable value. - Decided against Revenue.

Summary

Issues Involved:
- Valuation of transportation charges in the assessable value for Central Excise duty.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI involved a dispute regarding the inclusion of transportation charges in the assessable value for Central Excise duty. The case revolved around the manufacturing of machinery for the pharmaceutical industry by the respondents. The Revenue contended that since the transportation charges were not separately shown in the invoice, they should be included in the assessable value, leading to duty liability on the respondents. Initially, the adjudicating authority upheld the demand, but on appeal, the Ld. Commissioner (Appeals) ruled in favor of the respondents, stating that the freight charges collected by them were not includible in the assessable value.

During the proceedings, the respondents requested an adjournment due to not receiving a copy of the appeal filed by the Commissioner. However, the Tribunal decided to proceed with the appeal for final disposal. The Ld. A.R. argued that as per Rule 5 of the Central Excise Valuation Rules, 2000, transportation charges needed to be shown separately in the invoice during the relevant period. Since the respondents did not fulfill this condition, the duty on transportation charges was deemed payable according to the Ld. A.R.

Upon consideration, the Tribunal noted that Rule 5 of the Central Excise Valuation Rules, 2000 had been amended, withdrawing the requirement to show transportation charges separately in the invoice. Additionally, there was no allegation that the respondents had recovered transportation charges exceeding the actual amount paid. The respondents maintained that they sold goods at the factory gate and charged transportation costs through debit notes. Relying on previous decisions, the Tribunal agreed with the Ld. Commissioner (Appeals) and upheld the impugned order, stating that the transportation charges collected by the respondents were not to be included in the assessable value.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, affirming the decision that transportation charges were not includible in the assessable value for Central Excise duty.