2015 (9) TMI 1023 - AT - Central Excise

Valuation of goods Deduction of freight from the assessable value - Held that - freight shown in the invoices in addition to basic price of the goods. It is clear from the terms of the bid documents also that basic price and other components have to be indicated separately. Therefore, there is no dispute that basic price and the freight components are clearly indicated separately in the invoices and therefore criterion i.e. cost of transportation should be in addition to the basic price of the goods stand fulfilled. Since Revenue could not bring any material on record that the freight equated or actual, we have no option except to agree with the Ld. Counsel and also it can be seen from the amount of transportation shown in the invoices that the same is actual. - appellant are entitled for deduction of cost of transportation from the value of the goods hence the impugned order is not sustainable. Decided in favour of assessee.

Summary

Issues:
1. Applicability of deduction on account of freight in excisable goods clearance.
2. Interpretation of bid documents regarding composite prices and transportation costs.
3. Determination of place of sale for excisable goods.
4. Compliance with Central Excise Valuation Rules for deduction of transportation costs.

Detailed Analysis:
1. The appeal challenged the rejection of deduction on account of freight in the clearance of excisable goods, specifically Jelly filled cable, by the Commissioner of Central Excise & Customs(Appeals). The appellant contended that they had shown actual freight separately in the sale invoices to the Department of Telecommunication, meeting the criteria for deduction under Section 4 of the Central Excise Act and Valuation Rules. The appellant emphasized the importance of distinguishing between actual freight and equated freight, supported by relevant judgments like Goodyear India Ltd. vs. Commissioner of C. Ex. Delhi-IV (2014) and others.

2. The bid documents outlined the requirement for a composite price inclusive of various components, including freight, to be quoted separately. The Tribunal analyzed the bid terms, emphasizing the need for separate indication of basic price and other components, including freight. The Tribunal noted that the condition of testing at the place of delivery did not negate the sale occurring at the factory gate, thus justifying the deduction of transportation costs as mandated by Rule 5 of the Central Excise Valuation Rules.

3. The Tribunal delved into the determination of the place of sale for the excisable goods, highlighting that sale at the factory gate warranted the deduction of transportation costs. The analysis of the bid terms and general trade practices supported the conclusion that the sale occurred at the factory gate, allowing for the deduction of transportation costs from the assessable value of the goods.

4. Compliance with Central Excise Valuation Rules was a crucial aspect of the judgment, with the Tribunal emphasizing the fulfillment of criteria for deduction of transportation costs. By examining the invoices and bid terms, the Tribunal confirmed that the transportation costs were shown separately and were in addition to the basic price of the goods, meeting the requirements for deduction. The Tribunal's decision to allow the appeal and grant consequential relief was based on the fulfillment of statutory provisions and supporting evidence presented during the proceedings.