2017 (1) TMI 292 - AT - Central Excise

Valuation - extra consideration received by the appellant on account of transit insurance was to be added in the assessable value or not? - Held that - reliance was placed in the appellant s own case JCT LIMITED Versus COMMISSIONER OF CENTRAL EXCISE, JALANDHAR 2013 (9) TMI 492 - CESTAT NEW DELHI , where it was held that The price charged at the time of removal was not the sole consideration for transaction of sale. The adjudicating authority and the Commissioner (Appeals) were right in including the difference of transit insurance charged and the amount received by the appellant against transit insurance charge in sale price to work out transaction value for the purpose of excise duty. The extra consideration received by the appellant over and above on actual insurance charges, is required to be added in the assessable value of the finished goods - appeal dismissed - decided against appellant-assessee.

Summary

Issues: Valuation of excisable goods for charging excise duty based on extra consideration received on account of transit insurance.

Analysis:
1. Valuation of Goods for Excise Duty: The appellant appealed against an order requiring extra consideration received on transit insurance to be added to the assessable value for excise duty calculation, along with interest and penalty. The Tribunal referred to Section 4(1) of the Central Excise Act, 1944, which states that the transaction value should be the price actually paid or payable for the goods, including any additional consideration. The Tribunal found that the appellant charged more than 300% of the transit insurance premium from the buyer, indicating that the price at the time of delivery was not the sole consideration for the sale. This led to evasion of excise duty, justifying the inclusion of the extra amount in the transaction value for duty assessment.

2. Precedent Analysis: The Tribunal discussed a previous judgment regarding equalized freight charges and emphasized that excise duty is a tax on the manufacturer, not on profits from transportation. The Tribunal rejected the appellant's reliance on another judgment, stating that the price charged at the time of removal must be the sole consideration for sale, which was not the case here due to the inflated transit insurance charges. The Tribunal upheld the decision to include the extra insurance charges in the assessable value, dismissing the appeal based on consistent interpretation of the law and relevant precedents.

3. Conclusion: The Tribunal affirmed the impugned order, agreeing with the earlier decision in the appellant's case that the extra consideration received on transit insurance should be added to the assessable value of the goods for excise duty calculation. The judgment highlighted the necessity for the price at the time of removal to be the sole consideration for sale, emphasizing compliance with excise duty valuation rules. Therefore, the appeal was dismissed, and the impugned order was upheld based on the legal provisions and precedents cited in the analysis.