2021 (1) TMI 709 - AT - Central Excise

Valuation - exclusion of freight amount from arriving at the assessable value for the purpose of payment of central excise duty - transaction value or not - place of removal - Section 4(1)(a) of the Central Excise Act, 1944 - time limitation - HELD THAT - The facts in that instant case, in essence, were that the assessee had paid the duty by including freight amount. Considering the judgment of the Hon ble Supreme Court in COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. 2015 (10) TMI 613 - SUPREME COURT , the duty paid on freight was legally not payable. So the duty amount paid legally as well as the amount legally not payable but paid, both were entitled for refund if the refund claim was filed as per law. The issue whether or not place of removal can be manufacturer s premises or buyer s premises has since been settled by the Apex Court in Ispat Industries, which has to be respectfully followed for the purpose of assessment of duty as per law. Since the instant case is being decided on merits, we are not inclined to go into the aspect of limitation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the appellant can claim exclusion of the freight amount from arriving at the assessable value for the purpose of payment of central excise duty.

Analysis:
1. Background: The appeal was filed by M/s. Aditya Birla Chemicals against the demand of Central Excise duty along with penalty and interest confirmed by the Commissioner, Central Excise, Ranchi.

2. Contention of Appellant: The appellant argued that as per Section 4 of the Central Excise Act, the place of removal cannot be the buyer's premises, and freight amount till the buyer's premises should not be included in the transaction value. They cited legal precedents and rules to support their argument.

3. Contention of Department: The Department relied on a Supreme Court decision and a circular to argue that if goods are sold at the buyer's premises, the freight amount should be included in the assessable value for Excise duty payment. They also cited a Tribunal decision to support their stance.

4. Judgment Analysis: The Tribunal analyzed the legal position as settled by the Supreme Court in the case of Ispat Industries, emphasizing that the place of removal should be the manufacturer's premises, not the buyer's premises. The Tribunal highlighted key observations from the Supreme Court's judgment regarding the interpretation of Section 4 of the Act.

5. Decision: The Tribunal concluded that the freight amount incurred for delivery of goods from the factory to the buyer's premises should be excluded from the assessable value for Excise duty payment. The Tribunal found the Department's argument not legally sustainable based on the settled legal position. The impugned order was set aside, and the appeal was allowed with consequential relief.

6. Final Remarks: The Tribunal's decision was based on the interpretation of legal provisions and precedents, emphasizing that the place of removal for Excise duty calculation should be the manufacturer's premises. The judgment provided a detailed analysis of the legal principles involved and resolved the issue in favor of the appellant.