2018 (9) TMI 168 - AT - Central Excise

Valuation - inclusion of loading and levelling cost incurred by the appellants buyer i.e. M/s N.S. Shetty in transporting gypsum further to his buyers - period August 2004 to October 06 - Held that - In the instant case, the appellants are selling the gypsum as-is-where-is-basis to the contractor i.e. M/s. N.S. Shetty himself who is selling the same to the cement manufacturers. In the instant case, therefore, no expenses are incurred by the appellants in the sale of cement to the contractor. Therefore, there is no question of includibility of such amount in the assessable value of cement sold by the appellants to M/s N.S. Shetty. No expenses are incurred by the appellants. As no flow back is alleged or evidenced, proposal to include the charges incurred by the buyer in respect of gypsum sold by the appellants to the contractor is by no stretch of imagination legally tenable. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Inclusion of loading and levelling cost incurred by the buyer in transporting gypsum further to his buyers during a specific period.

Detailed Analysis:

Issue 1: Inclusion of Loading and Levelling Cost
The issue in this case pertains to the inclusion of loading and levelling cost incurred by the buyer, M/s N.S. Shetty, in transporting gypsum further to his buyers during the period from August 2004 to October 2006. The appellants had engaged M/s N.S. Shetty as their contractor for transporting the slush from chute to the yard where it is levelled and then transported to buyers. The Excise authorities contended that the appellants had cleared gypsum without including the loading and levelling charges paid by the buyer to M/s N.S. Shetty. The department relied on a Supreme Court judgment and issued show-cause notices covering a specific period. However, the Tribunal, in an earlier case involving the same appellants, held that the expenses incurred were already taken into account while selling the gypsum to the buyers and were not an additional consideration received by the appellants. This decision was also upheld by the Larger Bench of the Tribunal.

Issue 2: Sale of Gypsum on As-is-where-is Basis
During the period from August 2004 to October 2006, the gypsum was sold by the appellants to the contractor, M/s N.S. Shetty, on an as-is-where-is basis, who further sold it to cement companies. The department issued show-cause notices proposing to levy penalties, alleging that the amount paid to M/s N.S. Shetty for loading and unloading should be included in the assessable value of the gypsum sold by the appellants. The Commissioner (Appeals) upheld the department's order. However, the appellants contended that as per previous Tribunal decisions, no expenses were incurred by them in the sale of gypsum to the contractor, and therefore, the charges incurred by the buyer should not be included in the assessable value. The Tribunal found that the factual position in the present case was different from the earlier case, and as no expenses were incurred by the appellants in the sale of cement to the contractor, the proposal to include the charges incurred by the buyer was legally untenable.

In conclusion, the Tribunal allowed the appeals, stating that the issue was squarely covered by previous decisions in the appellants' favor. The Tribunal emphasized that no expenses were incurred by the appellants in the sale of gypsum to the contractor, and therefore, the charges incurred by the buyer should not be included in the assessable value. The decision was pronounced in court on August 24, 2018.