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2018 (11) TMI 1362 - AT - Central ExciseValuation - inclusion of excess amount alleged to have been recovered from the buyer than the actual freight incurred in the accessable value - Held that - It has been held in the case of INDIAN OXYGEN LTD. VERSUS COLLECTOR OF CE 1988 (7) TMI 58 - SUPREME COURT OF INDIA by the Hon ble Supreme Court that even if the excess amount is released on the account of freight from the buyers it cannot be part of the excessable value under Rule 5 of CVR-2000. The excess amount of freight realized is not required to be added for the purpose of computation of excisable value for the payment of Central Excise duty - appeal allowed - decided in favor of appellant.
Issues Involved:
Inclusion of excess amount in assessable value under Central Excise Act, 1944. Detailed Analysis: The judgment in question pertains to an appeal arising from an Order-in-Appeal dated 14/11/2007 following an adjudication order passed by the primary Adjudicating Authority. The central issue revolves around the inclusion of an alleged excess amount recovered from the buyer, in comparison to the actual freight incurred, in the assessable value under section 4(1)(a) and (b) of the Central Excise Act, 1944, in conjunction with the Central Excise Valuation (Determination of price of assessable goods) Rules, 2000. The appellant, engaged in the manufacture of "electric supply meter," supplied goods to entities like State Electricity Boards, TATA Power, and Reliance Power. The dispute period ranged from 1/04/2004 to 31/12/2004. The Revenue contended that the appellant had recovered excess transportation charges from buyers, which should have been part of the assessable value as per Rule 4 of the CVR Rules, 2000. This purported omission led to an alleged incorrect discharge of Central Excise duty, with the Department accusing the appellant of withholding material facts. During the proceedings, the appellant's advocate argued that separate contracts governed the sale of goods and transportation, with charges not based on actual costs. The appellant was obligated to transport goods to State Electricity Boards at specified tender rates after inspection by the authorities. Citing legal precedents like Associated Strips Ltd. v. Commissioner of Central Excise, the advocate emphasized the unconditional appropriation of goods to contracts, leading to delivery to buyers through carriers. The judgment referenced cases like M/s. Baroda Electric Meter and Commissioner of Central Excise, Noida vs. Accurate Metes Ltd, where it was established that even if excess amounts were collected from buyers for freight, they should not be included in the assessable value. Relying on these precedents, the Tribunal concluded that the excess freight realized need not be added to the excisable value for Central Excise duty computation, thereby setting aside the impugned order and allowing the appeal. In summary, the judgment delves into the intricacies of assessing excess amounts in the assessable value under the Central Excise Act, 1944, emphasizing legal principles, contractual obligations, and precedents to arrive at a decision that aligns with established interpretations and rulings in similar cases.
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