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TMI Blog2010 (1) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... to be produced by the Assessee, has to be excluded from the assessable value. The deduction of the freight charged by the Appellant from their customers on equalized basis and which is shown separately in the invoices cannot be disallowed on the ground that it is equalized freight. Appeal allowed by way of remand. - E/200-201/2005 - 7-8/2010-EX(PB) - Dated:- 11-1-2010 - R.M.S. Khandeparkar and Shri Rakesh Kumar, JJ None, for the Appellant. Shri B.L. Soni, DR, for the Respondent. ORDER The Appellant manufacture Electrical Transformer chargeable to Central Excise Duty under heading 85.04 of the Central Excise Tariff. They supply transformers to various State Electricity Boards. The freight is charged by the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the excisable goods, that the deduction permitted was of the actual freight, not the freight charged on averaged or equalized basis, that averaged/equalized freight, in most cases were more than the actual for the short distances and less than the actual for long distance and that as per the Board s Circular No. 354/81/2000-TRU dated 30-6-2000, exclusion of transportation cost is allowed only if the assessee has shown them separately in the invoice and the exclusion is permissible only for the actual cost so charged from the buyers and that if the assessee has a system of pricing and sale at uniform prices inclusive of equalised freight for delivery at factory gate or elsewhere, no deduction for freight element will be permissible. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansportation from the place of removal to the place of delivery shall be excluded from such price . 5.1.1 Hon ble Supreme Court, in para 49 50 of its; judgment in case of Union of India Others etc. v. Bombay Tyre International Others reported in 1983 (14) E.L.T. 1896 (S.C.) with regard to Section 4(2) has held as under : ......But the assessee will be entitled to a deduction on account of cost of transportation of the excisable article from the factory gate to the place or places when it is sold. The cost of transportation will include the cost of insurance freight on transportation of the goods from the factory gate to the places of delivery. 50. When freight is averaged and the averaged freight is included in the wholesale cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 4(3)(d). Though in the new Section 4, there is no provision analogous to sub-section (2) of old Section 4, specifically providing for exclusion of the cost of transportation from the place of removal to the place of delivery, since the transaction value is for sale for delivery at the time and place of removal , in case the transaction value is for delivery at a place other than the place of removal, the cost of transport from the place of removal to the place of delivery in respect of which evidence has been produced by the assessee, will have to be excluded. 5.2.1 Rule 5 of the Central Excise Valuation Rules, 2000, as the same existed during the period from 1-7-2000 to 28-2-2003 provided that - When any excisable goods are sold in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the factory to the place of removal, where the factory is not the place of removal, shall not be excluded for the purposes of determining the value of the excisable goods . 5.2.3 Other than the Explanation 2 specifically clarifying that the cost of transport from the factory to the place of removal, in case the place of removal is other than the factory gate, is includible in the assessable value, which in any case, is a natural corollary of the provisions of Section 4(1)(a), the main difference between the Rule 5, as it stood during the period from 1-7-2000 to 28-2-2003 and as it stood w.e.f. 1-3-2003 is that the Rule 5 of the later period specifically provides for deduction of cost of transportation from the place of removal to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs (supra) with regard to the provisions of old Section 4(2) will be applicable while interpreting the provisions of Rule 5 of the Central Excise Valuation Rules, 2000, and the exclusion of cost of transportation from the place of removal to the place of delivery from the assessable value would be permissible even when such freight is charged on averaged/equalized basis. In fact, same view has been taken by this Tribunal in case of CCE, Bhopal v. Laxmi Engineering reported in 2005 (179) E.L.T. 342 (Tri.-Del.) wherein it was held that transport charges will not be includible in the assessable value when the freight from the place of removal to the place of delivery is charged on equalized basis as Rule 5 of the Central Excise Valuation Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X
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