2018 (7) TMI 156 - AT - Central Excise

Refund of Excise duty - N/N. 32/1999-CE - It is the case of the department that the appellants have wrongly included the cost of transportation in the assessable value and as such they have inflated the transaction value and paid higher duty - Held that - The issue is no more res-integra in view of the decision of the Tribunal in the case of Commissioner of Central Excise, Shillong Vs. Guwahati Carbon Ltd. 2009 (4) TMI 269 - CESTAT, KOLKATA , where the appeal of the Revenue was allowed in an identical situation, holding that the Respondents are not entitled to include freight and insurance charges in the assessable value and the duty on the impugned goods requires to be re-calculated accordingly - appeal dismissed - decided against appellant.

Summary

Issues:
- Assessment of excise duty under Notification No.32/99-CE
- Inclusion of transportation cost in assessable value
- Appeal against demand of duty and penalty

Assessment of excise duty under Notification No.32/99-CE:
The appellant, engaged in manufacturing Ferro Silicon, availed exemption/refund of excise duty under Notification No.32/99-CE. Central Excise Officers found that the appellant included transportation cost in the assessable value of finished goods, leading to over-valuation. This contravened Central Excise Act, resulting in excess refund to the appellant. A show cause notice was issued for duty recovery, interest, and penalty. The adjudicating authority dropped part of the demand but confirmed duty of ?7,09,300. On appeal, the Commissioner upheld the decision, leading to the present appeal before the Tribunal.

Inclusion of transportation cost in assessable value:
The department argued that including transportation cost inflated the transaction value, resulting in higher duty payment and refunds. The Tribunal referred to a previous case where it was established that the place of delivery cannot be considered the place of removal, and transportation charges should not be included in the assessable value. Citing various decisions, including one by the Supreme Court, it was concluded that freight and insurance charges cannot be part of the assessable value, leading to a re-calculation of duty. The Tribunal held that the appellant was not entitled to include such charges, and the duty needed to be re-calculated accordingly.

Appeal against demand of duty and penalty:
After considering the arguments and precedents, the Tribunal found no reason to interfere with the impugned order. Consequently, the appeal filed by the appellant was dismissed. The Tribunal allowed the Department's appeals in terms of excluding freight and insurance charges from the assessable value, leading to a re-calculation of duty and refund entitlement for the appellant. The decision was pronounced in the open court, bringing the matter to a close.