2016 (6) TMI 672 - AT - Central Excise

Assessable value - Revenue entertained a view that the transport expenditure of the bare pipes from the respondent premises to the job worker premises is to be added in the assessable value - Held that - In the present case the goods were removed from the premises of the appellant for the purpose of job work and not for subsequent sale from the job workers premises. Since the respondent is adopting the contract price for payment of duty and such value adopted for coated pipes from the premises of the job worker is in accordance with law, there is no ground for any addition towards freight. In view of the above finding on fact by the ld. Commissioner, we find no ground to interfere with the said impugned order. In the grounds of appeal the Revenue emphasized on the applicability of Rule 5 and place of removal . It was argued that the place of removal should be considered as job worker s premises In view of the factual finding as recorded in the impugned order and the fact that the respondents are discharging duty on contract price, there is no merit in the present appeal. - Decided against revenue

Summary

Issues:
1. Whether transport expenditure of bare pipes from the appellant's premises to the job worker's premises should be added to the assessable value for Central Excise Duty calculation.
2. Applicability of Rule 5 and determination of the "place of removal" concerning the duty calculation.

Analysis:

Issue 1:
The appeal pertains to the dispute over adding transport expenditure of bare pipes from the appellant's premises to the job worker's premises to the assessable value for Central Excise Duty calculation. The Revenue initiated demand proceedings based on this premise, resulting in a confirmed duty demand and penalty on the respondent by the Original Authority. However, the ld. Commissioner (Appeals) set aside the original order and allowed the appeal, leading to the Revenue's challenge before the Appellate Tribunal CESTAT NEW DELHI. The ld. Commissioner found that since the goods were removed for job work and not for subsequent sale from the job worker's premises, Rule 5 would not apply. As the respondent was using the contract price for duty payment, the value adopted for coated pipes from the job worker's premises was deemed lawful, eliminating the need for additional freight charges in the duty calculation.

Issue 2:
The second issue revolves around the applicability of Rule 5 and the determination of the "place of removal" concerning the duty calculation. The Revenue argued that the place of removal should be considered as the job worker's premises, emphasizing Rule 5 in their appeal. However, the Tribunal, in alignment with the factual findings in the impugned order, upheld the ld. Commissioner's decision. The Tribunal noted that since the respondents were discharging duty based on the contract price and a previous similar finding by the Tribunal in a related case involving the same respondent, there was no merit in the Revenue's appeal. Consequently, the Tribunal dismissed the appeal, affirming the decision of the ld. Commissioner (Appeals) and maintaining that the transport expenditure need not be added to the assessable value for duty calculation.

This comprehensive analysis of the judgment highlights the key issues, legal interpretations, and the reasoning behind the decision rendered by the Appellate Tribunal CESTAT NEW DELHI.