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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 ..... se two appeals is as to whether during the period from 1-7-2000 to 1-8-03, the equalized freight was excludible from the assessable value of the goods. The Assistant Commissioner, Central Excise, Division-I, Bhopal vide orders-in-original No. 39/AC-I/ADJ/2003 dated 15-9-03 and No. 14/AC-I/ADJ/2004 dated 8-6-04 disallowed the deduction of equalized freight for periods from 1-6-02 to 30-6-02 and 1-10-02 to 1-8-03 and confirmed the duty demands of Rs. 48,960/- and Rs. 49,760/- respectively alongwith interest and imposed penalty of Rs. 10,000/- each under Section 25(1) of Central Excise Rules, 2002. On appeal to Commissioner (Appeals), the Commissioner (Appeals), vide order-in-appeal No. 726-727/CE/BPL/04 dated 28-10-04 upheld the Asstt. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned in para 7 of the show cause notice dt. 12-6-03 (adjudicated vide order-in-original No. 39/AC-I/ADJ/03, dated 17-9-03) and para 5 of the show cause notice dated 16-10-03 (adjudicated vide order-in-original No. 14/AC-I/ADJ/04 dated 8-6-04) - (a) purchase orders placed by the Electricity Boards are for supply of Transformers at various locations of the customers at a uniform FOR price, (b) the invoices issued by the Appellant show instead of actual freight for each location, only averaged/equalized freight; and (c) the exclusion of the freight from the place of removal to the place of delivery is sought to be denied only on the ground that the freight mentioned in the invoices is not the actual freight, but averaged freight and Rule 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry gate, the averaged freight included in such wholesale cash price has to be deducted in order to arrive at the real wholesale cash price at the factory gate and no excise duty can be charged on it". 5.1.2 Thus for the period prior to 1-7-2000, as per Hon'ble Supreme Court's judgment in case of Bombay Tyre International Ltd. & others (supra) with regard to sub-section (2) of Section 4, as it stood during that period, cost of freight from the place of removal to the place of delivery is excludible from the assessable value even when the freight is charged from the buyer on averaged/equalized basis. 5.2 With effect from 1-7-2000, old Section 4 and Central Excise Valuation Rules, 1975 were replaced by new Section 4 read with Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the actual cost of transportation from the place of removal upto the place of delivery of such excisable goods, provided the cost of transportation is charged to the buyer in addition to the price for the goods and is shown separately in the invoice for such excisable goods". 5.2.2 With effect from 1-3-2003 by Notification No. 11/03-C.E. (N.T.), dated 1-3-03, Rule 5 was amended and the amended Rule 5 reads as under : "Where any excisable goods are sold in circumstances specified in clause (a) of sub-section (1) of Section 4 of the Act, except the circumstances in which the excisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace of removal to the place of delivery, charged on averaged basis is excludible from the assessable value if it has been calculated in accordance with the generally accepted principles of costing. The Board's Circular No. 354/81/2000-TRU, dated 30-6-2000 is not applicable to the facts of this case as in this case, the freight, though on averaged basis, is separately shown in the invoices. 5.3 The question now arises as to whether during the period from 1-7-2000 to 28-2-2000, when there was no specific provision for exclusion of cost of transportation from the place of removal to the place of delivery when it is charged on averaged basis, the exclusion of such averaged freight from the assessable value can be allowed. 5.3.1 Since as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t during the period of dispute, 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. What has to be seen is as to whether the quantum of averaged/equalized freight has been determined in accordance with the generally accepted principles of costing and for that purpose whether the assessee has produced necessary evidences and to analyse the same to arrive at the correct finding. 7. The impugned order is, therefore, set aside and the matter is remanded to the original adjudicating authority for the above purpose in accordance with the provision of law and bearing in mind the observations here ..... X X X X Extracts X X X X X X X X Extracts X X X X
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