2017 (6) TMI 1099 - AT - Central Excise

Valuation - sale through depot/consignment agent - transportation charges - includibility - Held that - Tribunal has held in the said case of Ispat Industries Ltd. Versus Commissioner of Central Excise, Nagpur 2003 (12) TMI 130 - CESTAT, MUMBAI that cost of transportation from the factory gate to the depot/consignment agents which is place of removal up to the place of delivery is admissible for deduction - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against Order-in-Appeal No.20-CE/LKO/2007
- Allegation of charging extra amount on goods sold from depot
- Show Cause Notice for short paid Central Excise duty
- Dispute over transaction charges
- Appeal before Tribunal

Analysis:
The appeal was filed by M/s U. P. State Spinning Co. Ltd. against Order-in-Appeal No.20-CE/LKO/2007 dated 21.05.2007 passed by Commissioner of Customs & Central Excise (Appeals), Lucknow. The appellant was engaged in the manufacture of various types of yarn. A Show Cause Notice was issued alleging that the appellant charged extra amount on goods sold from depot/consignment agents compared to those sold from the factory gate, resulting in a demand for short paid Central Excise duty. The Original Authority confirmed the demand, imposing a penalty under Rule 25 of Central Excise Rules, 2002. The appellant's submission that the extra amount represented transaction charges deductible from the assessable value was not accepted. The Commissioner (Appeals) upheld the Order-in-Original, leading to the appellant's appeal before the Tribunal.

During the proceedings, the appellant submitted a Time Petition citing non-availability of a train ticket for their Counsel, which was rejected due to previous adjournments granted. The appellant argued that the alleged extra amount was for transportation costs, supported by a precedent involving Ispat Industries Ltd. The Tribunal, after considering submissions and records, referred to the Ispat Industries case, holding that transportation costs from the factory gate to the depot/consignment agents were deductible. Consequently, the Show Cause Notice was deemed unsustainable, leading to the appeal's allowance, setting aside both the impugned Order-in-Original & Order-in-Appeal, with the appellant entitled to consequential relief as per the law. The decision was dictated and pronounced in Court by the Tribunal.