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TMI Blog2011 (7) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... earance: Shri V.K. Singh, Authorised Representative (SDR) for the appellant Shri Bharat Raichandani, Advocate for the respondent Per: P.R. Chandrasekharan: These two departmental appeals are directed against Order-in-Appeal No: RK/191 to 192/NGP-I/2003 dated 16/10/2003 passed by the Commissioner of Central Excise (Appeals), Nagpur. 2. The facts of this case are as follows: 2.1 M/s. Ramkrishna Electricals Pvt. Ltd., Nagpur ('assessee' for short) are manufacturers of electrical transformers and they supply the said goods to the State Electricity Boards. As per the purchase orders, the price charged by the assessee was on FOR basis inclusive of excise duty, sales tax, freight, etc. In the invoices issued for the suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order held that the sale in the instant case took place at the factory-gate and, therefore, cost of transportation from the factory to the stores of the Electricity Board at various locations need not be included while arriving at the assessable value. The learned appellate authority placed reliance on the orders of the Tribunal in Majestic Auto Ltd. vs. Commissioner of Central Excise, Meerut 2003 (57) RLT 19 and Filament India Others vs. Commissioner of Central Excise, Jaipur 2003 RLT 750 (Cegat-Del.) while arriving at his conclusion. 2.3 The department is in appeal against the said order of the learned Commissioner (Appeals). 3. The arguments adduced by the learned SDR for the department is that the definition of 'pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OR destination prices. Similarly, sales tax is levied on such FOR prices and the FOR prices indicated includes not only the excise duty but also freight charges and sales tax. A perusal of price and delivery schedule attached to these purchase orders clearly indicates that while excise duty is discharged on the ex-works price, sales tax is discharged on ex-works price plus excise duty and freight. This clearly shows that sale has taken place at the delivery point and not at the factory-gate. In view of the above, excise duty liability has to be discharged on the value inclusive of freight as the 'place of removal' is not the factory-gate but the stores of the Electricity Board where the goods have been delivered. The learned SDR also relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. He contends that the transaction value has to be accepted as the assessable value when there is a sale of excisable goods and the sale is for delivery at the time and place of removal, assessee and the buyer are not related and the price is the sole consideration. In their case all these conditions are satisfied and since the sale took place at the factory-gate, the place of removal is the factory-gate and, therefore, the ex-factory price has to be taken to arrive at the transaction value. The learned counsel further argues that from the purchase orders it can be clearly seen that the State Electricity Board undertook testing of the samples of the goods to be supplied at the premises of the manufacturer in order to confirm the quality an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in sub-section 25(2) of the Bombay Sales Tax Act, 1959 the same includes the amount of value, consideration paid or payable to a dealer for any sale made, including any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery thereof other than the cost of insurance for transit or of installation if such cost is separately charged. In view of the above definition of the sale price in the Bombay Sales Tax Act, they have discharged sales tax liability on the price inclusive of freight charges. In any case, this does not affect the concept of transaction value as defined in Section 4 of the Central Excise Act, 1944. In the light of the above submissions, he contends that the order of the lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "where any excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of Section 4 of the Act except the circumstances in which the excisable goods are 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 cost of transportation from the place of removal upto the delivery of such excisable goods."Explanation (1) to the said rule further clarifies that the cost of transportation includes the actual cost of transportation and in case where freight is averaged, the cost of transportation calculated in accordance with generally accepted principles of costing. From the terms of the contract as also from the lega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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