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2024 (6) TMI 843 - CESTAT AHMEDABADValuation - excess freight collected as compared to the actual freight paid to the transporter is includable in the assessable value of the excisable goods or not - HELD THAT - The identical issue has been considered in catena of judgments, particularly based on the Hon ble Supreme Court Judgment in the case of Baroda Electric Meter Ltd 1997 (7) TMI 126 - SC ORDER where it was held that ' The Tribunal accepted the position that equalised freight was charged by the appellant from everyone, but proceeded to say that even though freight cannot be a part of the assessable value that wherever freight actually paid was less than the amount collected by way of freight and transportation charges the difference was appropriated by the appellant and, therefore, the same would be a part of the assessable value.' The excess freight recovered by the appellant from the customer as compared to the actual freight on account of transportation shall not include in the assessable value for the purpose valuation of excisable goods. The impugned order is set aside - Appeal allowed. Issues involved: Whether excess freight collected compared to actual freight paid to transporter is includable in assessable value of excisable goods.
Summary: The Appellate Tribunal CESTAT Ahmedabad considered the issue of including excess freight collected in the assessable value of excisable goods. The appellant's counsel argued that the issue had been previously decided by the Supreme Court and various decisions by the Tribunal. The Revenue reiterated the findings of the impugned order. The Tribunal examined previous judgments, especially relying on the Supreme Court's decision in Baroda Electric Meter Ltd case. The Tribunal found that the duty of excise is on the manufacturer, not on profits made by a dealer on transportation. Consequently, the Tribunal allowed the appeals and set aside the impugned judgment. In a subsequent case, the Tribunal reiterated that excess freight collected should not be included in the transaction value for charging excise duty, following the Supreme Court's decision in the Baroda Electric Meters case. The Tribunal emphasized that excess freight from customers is profit on transportation and not part of the value of goods. This decision was applicable even after amendments to Section 4 and related rules. Therefore, the Tribunal set aside the impugned orders and allowed the appeals. Based on previous decisions, the Tribunal concluded that excess freight recovered from customers should not be included in the assessable value of excisable goods for valuation purposes. Consequently, the demand was deemed unsustainable, leading to the setting aside of the impugned order and allowing the appeal. In conclusion, the Tribunal held that excess freight collected from customers compared to actual freight for transportation should not be included in the assessable value of excisable goods, leading to the setting aside of the impugned order and allowing the appeal.
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