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TMI Blog2004 (6) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... he terms of contract for supply of the goods, the goods were to be delivered on F.O.R. basis i.e. the goods were to be delivered at the consignees end. The applicant was also responsible for transit insurance. In respect of the goods cleared from 1-5-97 to 30-6-2000, the Revenue held the view that the freight amount should from part of the assessable value and by adding the freight element to the assessable value, they held that the applicant was liable to pay a duty amount of Rs. 32,38,036/-. In reaching the above view, the officers relied on the provisions in Section 4 of the Central Excise Act, 1944 (Act, for short) as it existed at the relevant time particularly with reference to the legal provisions as regards place of removal . The Revenue proceeded on the premise that in view of the contract prices being on F.O.R. destination basis and since the responsibility for arranging transit insurance was on the applicant, the ownership of the goods stood transferred to the consignees only at the consignee s end and accordingly the transportation charges should be included in the assessable value as the place of delivery will be the place of removal . The Revenue relied on two deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his C. No. V(15)Off/84/2002, dated 6-5-2004. 6. The final hearing was held on 7-5-2004. Shri Rajesh Chibber, Advocate appeared for the applicant and pointed out that in the investigation report, the Commissioner has accepted all the contentions raised by the applicant. The representative of Revenue made his submissions. 7. The Bench has perused the relevant records and considered the rival submissions. The major portion of the demand pertains to the period 1-5-97 to 30-6-2000. The basis for the demand has also been spelt out earlier in this order. Following the ratio of the two decisions of CEGAT in the case of M/s. Prabhat Zarda Factory Ltd. and M/s. Escorts J.C.B. Ltd., referred to earlier in this order, the Revenue have held that the ownership of the goods remained with the applicant till the goods were delivered at the consignee s end, because the price as per the contracts were for delivery at the destination and the applicant was to arrange for transit insurance. In his detailed comments on the Settlement Application, the Commissioner, Central Excise, Ghaziabad in his report C. No. V(15)Off/Adj/234/2002, dated 26-5-2003 has inter alia stated that decision on the above two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in the purchase order itself that unless the above documents are sent, the applicant would be responsible for Warfage, demurrage or loss/risk in transit. It is thus clear that the price at ex-factory is clearly available and further the delivery for sale also took place at the factory gate. In so far as the objection with regard to the payment terms which provided for payment after acceptance of the goods after 30 days from the date of receipt of the Bill, the Bench finds that in view of the provisions for deferred payment in Section 2 of the Act, it cannot be held that the sale has not taken place. In fact as per Section 2(h) of the Act sale and purchase , mean any transfer of the possession of the goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. Thus, the Act itself recognizes the sale even in respect of deferred payments. In view of the above and once the goods are delivered to the transporters with the documents in the name of consignees (and not self), the transfer and sale takes place. One another contract relied upon by the Respondent Commissioner is a purchase order dated 24-8-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surance, and payment terms have also been discussed in detail in the above judgments, and following the rulings therein, we hold that there is no justification for demanding duty on the freight element for the goods cleared during 1-5-97 to 30-6-2000. 10. The issue can be looked at from another angle also. 10.1 Place of removal as per the Section 4(4)(b) of the Act at relevant time reads as follows :- (a) place of removal means - (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory, and from where such goods are removed; 10.2 On a plain reading, the above sub-section conveys the meaning that place of removal means the place from where goods are removed, be it a factory, warehouse or any other place or premises. That the stress is on the removal of the goods is evident from the fact that there is a tail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the goods exported on payment of duty to Nepal. The applicant has accepted the additional duty payable on this account and has accordingly quantified it as Rs. 5,55,731/-. In computing this, the extra amount collected under the garb of freight is taken as cum-duty amount. We agree with this, since this amount is in effect added to the proceeds on which duty is demanded, and this duty amount is not shown to have been reimbursed to the applicant. Therefore, no further discussion is called for on this issue. 12. In respect of the goods exported under bonds to Nepal, the Revenue has demanded duty on the freight element, which was realized in Nepalese rupees on the ground that the same is not a hard currency. However, the Bench agrees with the contention of the applicant namely that when no duty is payable at all on the goods exported under bond, duty cannot be charged only on the freight element on the ground mentioned above. The demand on this account is not sustainable. 13. The last issue is in respect of the payment of duty on the inspection of the goods carried out by third party inspection agencies as nominated by some of the consignees. It is an admitted fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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