2018 (4) TMI 1089 - AT - Central Excise

Refund of education/ higher education cess - appellant enjoying area based exemption under N/N. 56/2002-CE dated 14/11/2002 - Held that - Hon ble Supreme Court in the case of SRD Nutrients Pvt. Ltd. vs. CCE, Guwahati 2017 (11) TMI 655 - SUPREME COURT OF INDIA held that the assessee is eligible for such refund which is paid alongwith the excise duty once the excise duty itself was exempted - refund allowed. Valuation - includibility - outward freight up to the place of delivery - Held that - Hon ble Supreme Court in CCE, Nagpur vs. Ispat Industries Ltd. 2015 (10) TMI 613 - SUPREME COURT held under no circumstances can the buyer s premises, therefore, be the place of removal for the purpose of Section 4 on the facts of the present case - there is no justification for the appellant to consider the assessable value with inclusion of freight element after the goods were sold/removed from the factory - decided against appellant. Appeal allowed in part.

Summary

Issues:
1. Eligibility of the appellant for refund of education/higher education cess paid on final products.
2. Valuation of excisable goods manufactured and cleared by the appellant.

Analysis:
1. The appellant, located in Jammu, enjoys area-based exemption under Notification 56/2002-CE. The first issue concerns the eligibility of the appellant for a refund of education cess paid on final products. The Revenue contended that such cess is not refundable as no exemption is provided for it. Both parties agreed that the issue is covered by the decision of the Hon'ble Supreme Court in SRD Nutrients Pvt. Ltd. vs. CCE, Guwahati. Following the Supreme Court's ruling that the assessee is eligible for a refund of cess once the excise duty itself was exempted, all appeals on this dispute were decided accordingly.

2. The second issue revolves around the valuation of excisable goods manufactured and cleared by the appellant. The appellant included outward freight in the transaction value of final products, while the Revenue argued that the goods were sold and cleared at the factory gate, making the freight component ineligible for inclusion in the transaction value. The Revenue's position led to the denial of refunds and recovery of sanctioned refunds. The Tribunal examined the statutory definition of "place of removal" under Section 4 of the Central Excise Act, noting that the appellant claimed goods were sold on "FOR" basis with the place of removal being the delivery point to the buyer. Citing the decision in CCE, Nagpur vs. Ispat Industries Ltd., the Tribunal held that the inclusion of freight in the assessable value after goods were sold from the factory was not justified. Consequently, the appellant's claim for inclusion of freight element in the assessable value under Notification 56/2002-CE was deemed unsustainable.

In conclusion, the Tribunal allowed the appeal regarding the eligibility of the appellant for a refund of education cess but dismissed the appeal concerning the inclusion of the freight element in the assessable value of excisable goods.