2020 (3) TMI 701 - AT - Central Excise

Refund of Excise Duty - differential freight charges collected from buyers during the period 01.04.2008 to 18.12.2008 - HELD THAT - The place of removal is the factory gate and any profit earned by the appellant on account of transportation charges cannot form part of assessable value, therefore whatever excise duty paid by the appellant on account of profit earned is not duty and the same is to be refunded to the appellant. Similar view taken in the case of COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX, TIRUPATI VERSUS MANCHUKONDA PRAKASHAM CO. (NOW M/S. MANCHUKONDA PRAKASHAM INDUSTRIES INDIA PVT. LTD.) 2015 (5) TMI 1002 - CESTAT BANGALORE where it was held that There is plethora of decisions of the Tribunal holding that such excess collection on account of freight cannot form part of the assessable value of the goods unless the Revenue produces evidence to show that value of the goods was collected in the garb of the freight charges. There is no such evidence available much less any allegation in the present appeal. Appeal allowed - decided in favor of appellant.

Summary

Issues: Refund claim of excise duty on differential freight charges.

Analysis:
1. Background: The appellant, a manufacturer of PSCC Poles, filed a refund claim for excise duty paid on the differential freight charges collected from buyers during a specific period.

2. Appellant's Position: The appellant argued that as per a Supreme Court ruling, the difference in freight amount collected for transportation should not be added to the assessable value of goods. Refund claims for other units were allowed, and a previous tribunal order supported their case. They contended that the factory gate is the place of removal, entitling them to the refund claim.

3. Revenue's Argument: The Revenue cited a CBEC Circular stating that expenses incurred by the appellant until delivery to the buyer should be part of the assessable value, thus rejecting the refund claim.

4. Decision: The Tribunal found in favor of the appellant, emphasizing that transportation charges were separate from manufacturing activities, and any profit from transportation should not be part of the assessable value. Citing a previous order in the appellant's favor, the Tribunal allowed the refund claim, stating that unjust enrichment did not apply in this case.

5. Conclusion: The impugned order was set aside, and the appeal was allowed with any consequential relief. The decision highlighted the distinction between manufacturing and transportation activities in determining the assessable value for excise duty refund claims.