2017 (3) TMI 710 - AT - Central Excise

Valuation - freight - goods sold through the consignment agent - whether the freight was required to be included in the assessable value as per section 4 (4) (b) (iii) of Central Excise Act, 1944 - Held that - the period of dispute is 1.4.2000 to 30.06.2000, the excise duty is payable at the price at which the goods cleared from the factory - the said issue came up before the Hon ble Apex Court in the case of Ispat Industries Ltd. 2015 (10) TMI 613 - SUPREME COURT wherein it was held that for the period from 28-9-1996 up to 1-7-2000, the place of removal has reference only to places from which goods are to be sold by the manufacturer, and has no reference to the place of delivery which may be either the buyer s premises or such other premises as the buyer may direct the manufacturer to send his goods - the appellant is not required to include the freight in the assessable value - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Inclusion of freight amount in assessable value as per Central Excise Act, 1944.
- Interpretation of "place of removal" for excisable goods.
- Applicability of extended period of limitation for demand of duty.

Analysis:

Issue 1: Inclusion of freight amount in assessable value
The appellant, engaged in manufacturing hot rolled steel strips, collected freight from consignment agents on goods sold. The dispute arose regarding whether this freight amount should be included in the assessable value as per section 4 (4) (b) (iii) of the Central Excise Act, 1944. The appellant argued that during the period in question, the place of removal was their factory, and thus, no freight needed to be included in the assessable value. The appellant relied on a decision by the Hon'ble Apex Court in the case of Ispat Industries Ltd. (2015) to support their position. The Tribunal, considering the legal precedent, held in favor of the appellant, stating that the freight need not be included in the assessable value.

Issue 2: Interpretation of "place of removal"
The Tribunal referred to the decision of the Hon'ble Apex Court in the case of Ispat Industries Ltd. to clarify the concept of "place of removal" for excisable goods. It was highlighted that for the relevant period, the place of removal only referred to places from which goods were to be sold by the manufacturer, not the place of delivery. The Tribunal emphasized that the factory premises or warehouse were the only places of removal during the specified period. The Tribunal, in line with the legal interpretation provided by the Hon'ble Apex Court, concluded that the buyer's premises could not be considered as the place of removal for the purpose of Section 4 in the present case.

Issue 3: Applicability of extended period of limitation
The impugned order had invoked the extended period of limitation for demanding duty, interest, and penalty. However, based on the settled legal position and the decision of the Hon'ble Apex Court in the Ispat Industries Ltd. case, the Tribunal found no merit in the impugned order. Consequently, the Tribunal set aside the impugned order and allowed the appeal with any consequential relief.

In conclusion, the Tribunal, consisting of Members Ashok Jindal and Devender Singh, decided in favor of the appellant, ruling that the freight amount collected need not be included in the assessable value. The Tribunal's decision was based on the interpretation of the "place of removal" for excisable goods and the legal precedent set by the Hon'ble Apex Court. The impugned order was set aside, and the appeal was allowed, providing relief to the appellant.