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TMI Blog2012 (7) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... esale price - while there is no direction that the freight and insurance charges for carrying the goods from the factory to the depot is to be reduced from the retail price, there is no bar in reducing the same and, while doing so, as provided in the proviso, the proper officer is required to take note of the nature of the excisable goods, the trade practice in that commodity and other relevant factors. The instant matter stood closed as far back as in 2003 decided in favour of the assessee, it would not be appropriate to interfere with the judgment of the Tribunal - but in future it will be permissible for the revenue to go into the question whether the entire freight and insurance, as paid by the assessee, for carrying the goods from i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined on the basis of retail price, as reduced by such amount as is necessary and reasonable. Assessee contends that freight and insurance charges incurred by the assessee for taking goods from its factory to its depots are such amount as are necessary and reasonable for arriving at the retail sale price, when the same is the sole consideration for sale. On the other hand, it is the contention of the Revenue that the amount of expenditure incurred on account of freight and insurance charges for carrying goods from the factory to depots cannot be reduced for the purpose of arriving at the value of the excisable goods manufactured by the assessee. In order to answer this short question one is required to take notice of Section 4 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in wholesale trade except (as applicable in this case) to a related person and the value cannot be determined under Clause (a) of Section 4 of the Act, the value shall be determined in case where the assessee sells the goods to a related person, who sells such goods in retail in the manner prescribed in Clause (a) of Rule 6 of the said Rules. Clause (a) of Rule 6 of the said Rules is as follows: where such goods are sold by the assessee in retail, the value shall be based on the retail price of such goods reduced by such amount as is necessary and reasonable in the opinion of the proper officer to arrive at the price at which the assessee would have sold such goods in the course of wholesale trade to a person other than a related person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the amount necessary and reasonable for being reduce is the amount incurred for affecting the sale and, accordingly, whatever expenses have been incurred for carrying the goods from the depot to the customer s point may be reduced, but not the expenses incurred for taking goods from the factory end to the depot. 4) Therefore, the answer to the question raised in the present proceeding is whether reduction of the cost freight and insurance charges incurred for carrying the goods from the depot to the customer s end would make the wholesale price available. 5) As aforesaid, in terms of the provisions of the Act, the assessee become liable to pay excise duty at the time of removal of the manufactured goods from its factory, but su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e carrying cost for taking the goods from the factory premises to yet another depot. A reasonable part thereof as is necessary and reasonable having regard to the nature of the excisable goods, trade practice in the commodity and other relevant factors may be allowed. What would be reasonable in the case of the assessee has not yet been determined. On the other hand it has been held out that the assessee is not entitled to any deduction at all. The instant matter stood closed as far back as in 2003. Subsequent matters were permitted to be closed in favour of the assessee by not taking up the matters higher up from the Tribunal. In the circumstances, it would not be appropriate on our part to interfere with the judgment of the Tribunal. We m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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