2024 (2) TMI 726 - AT - Central Excise

Valuation - inclusion of insurance charges recovered in excess from the customers - HELD THAT - The issue is not more res integra and has already been decided by the Hon ble Supreme Court in the case of BARODA ELECTRIC METERS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE 1997 (7) TMI 126 - SC ORDER , wherein the Hon ble Supreme Court held the excess amount represents profit element. Once this is so, the same cannot be subjected to excise duty inasmuch as the duty is leviable on manufacture of goods and not on profit. The impugned order set aside - appeal allowed.

Summary

Issues involved: Appellant assailing Order-In-Appeal regarding excise duty on excess insurance charges collected.

For the issue of assessable value and inclusion of excess amount in it, the Appellant argued that goods were sold at factory gate, not to related persons, and price was the sole consideration, citing Baroda Electric Meters Ltd. v/s Collector of Central Excise. The Departmental Representative supported the impugned order. The Tribunal referred to the Supreme Court case, setting aside the Order-In-Appeal and restoring the Order-In-Original, as excess amount represents profit element not subject to excise duty.

In conclusion, the Appellant's appeal was allowed, and the impugned Order-In-Appeal was set aside, restoring the Order-In-Original. The Tribunal followed the Supreme Court's ruling that excess amount represents profit element not subject to excise duty, thereby providing consequential relief to the Appellant as per law.