9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 90 - AT - Central ExciseValuation - fixation of Special Rate (value addition) - N/N. 1/2010-CE dared 6.2.2010 - whether net excise duty paid and not the total amount of duty paid is required to be deducted from the sale value of goods? - Held that - when an amount of duty is refunded to the assessee, under N/N. 1/2002-CE, the same has to be deducted from the excise duty paid by the appellant while arriving at actual value addition - this Tribunal in the case of Dharampal Satyapal Ltd. vs. CCE 2016 (5) TMI 1049 - CESTAT KOLKATA took the view that portion of excise duty which is refunded to the appellant under N/N. 32/95-CE is the duty which is considered as exempt. Whether freight outward is not to be deducted from the sale Value since as per explanation given in Para 6 (5) of Notification, only excise duty, value Added Tax and other indirect taxes are required to be excluded? - Held that - It is settled law that in the context of Section 4(3)(C) when the goods are on FOR destination sales and the freight is paid by the seller and the goods are to be insured by the seller, then the seller cannot claim deduction of freight and insurance from sale price - also, in the balance sheet for 2011-2012, the freight outward is shown under selling and distribution expenses. Hence, the freight outward is includible in the sale value. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether net excise duty paid, and not the total amount of duty paid, is required to be deducted from the sale value of goods. 2. Whether outward freight is not to be deducted from the sale value since, as per the explanation given in Para 6 (5) of the Notification, only excise duty, Value Added Tax, and other indirect taxes are required to be excluded. Issue-wise Detailed Analysis: 1. Net Excise Duty Deduction: The primary contention was whether the net excise duty paid (duty paid minus refund) should be deducted from the sale value of goods for calculating the actual value addition under Notification No.1/2010-CE dated 6.2.2010. The Revenue argued that the total duty paid should be deducted, not the net duty after refund. The Commissioner sided with the Revenue, stating that the refund is an incentive and not part of the value addition. The appellant argued that only the net duty paid should be considered, citing the CBEC Circular No.682/73/02/CX and the Supreme Court judgment in CCE, Jaipur-II vs. Super Synotex (India) Ltd. The Tribunal found merit in the appellant's argument, emphasizing that the refund mechanism is designed to operationalize the exemption and should not be considered part of the value addition. The Tribunal noted that the terms "excise duty" and "total duty paid" are not identical and concluded that the net duty paid should be deducted to arrive at the actual value addition. 2. Outward Freight Deduction: The second issue was whether outward freight should be excluded from the sale value. The Commissioner held that the point of sale is the factory gate and that freight and insurance should not be included in the sale value. The appellant contended that their sales were FOR destination sales, with freight shown as paid on invoices and outward freight listed under selling and distribution expenses in their balance sheet. The Tribunal agreed with the appellant, referencing settled law that for FOR destination sales, where the seller pays for freight and insurance, these costs cannot be deducted from the sale price. The Tribunal cited Hard Castle Petrofer Pvt. Ltd. vs. CCE, Jammu and found that outward freight should be included in the sale value. Conclusion: The Tribunal set aside the Commissioner's order, ruling in favor of the appellant on both issues. The net excise duty paid should be deducted from the sale value for calculating actual value addition, and outward freight should be included in the sale value for FOR destination sales. The appeal was allowed, and the order was pronounced on 31.10.2017.
|
