2017 (3) TMI 856 - AT - Central Excise

Valuation - place of removal - whether the freight and insurance is excludable from the assessable value in a case where insurance is taken by the appellant? - denial on the ground that since the insurance is taken by the respondent, the ownership of the goods continues with the appellant till it is delivered to the buyer s premises and actual sale takes place at the premises of the buyer -Held that - the learned Commissioner has examined the purchase orders, acceptance orders, consignment notes and found that there is no condition related to the issue whether the inspection is carried out at site and therefore, held that the goods was not sold at customer s premises. The freight and insurance from place of removal is excludible from the assessable value - in the respondent s own case 2015 (10) TMI 613 - SUPREME COURT on the identical facts, the Hon ble Supreme Court has held that the place of removal is the factory gate of the assessee. Accordingly, the freight is not includible in the assessable value in the light of the judgement of the Hon ble Supreme Court in the respondent s own case - appeal dismissed - decided against Revenue.

Summary

Issues:
Whether freight and insurance are excludable from the assessable value when insurance is taken by the appellant.

Analysis:
The case involved a dispute regarding the deduction of transit insurance of goods from the factory gate to the buyer's premises. The department argued that since the insurance was taken by the respondent, ownership of the goods remained with the appellant until delivery at the buyer's premises, thus no abatement on freight and insurance was allowed. A show-cause notice was issued, and the adjudicating authority confirmed the demand. The respondent appealed to the Commissioner (Appeals), who set aside the demand, leading the revenue to appeal before the Tribunal.

The revenue contended that ownership of goods remained with the respondent due to the insurance policy, making the customer's premises the place of removal, not the factory gate. Therefore, they argued that insurance and freight borne by the respondent should not be excluded from the assessable value. On the other hand, the respondent's counsel argued that even though the insurance policy was taken by the appellant, the place of removal was the factory gate, making transportation and insurance excludable from the assessable value. They relied on a Supreme Court judgment in a similar case to support their argument.

The Tribunal carefully considered both sides' submissions and examined the facts and legal aspects of the issue. The Commissioner (Appeals) had analyzed the case records and determined that the goods were liable to duty at the customer's destination, emphasizing that freight-inclusive insurance is not part of the assessable value. They highlighted that the sale was completed at the factory gate, as demonstrated by order acceptance and the separate invoicing of freight charges. The Tribunal found that in the respondent's own case, the Supreme Court had ruled that the place of removal was the factory gate, thereby upholding the Commissioner's decision and dismissing the revenue's appeal.

In conclusion, the Tribunal upheld the decision that freight and insurance were excludable from the assessable value when insurance was taken by the appellant, based on the legal principles and judgments presented in the case.