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TMI Blog2016 (3) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the transaction value. In the present case the sale is effected at the factory gate which is the place of removal and transportation cost is separately indicated in the invoices As for the period 1/7/2000 to 31/3/2003, place of removal was only extended to either the factory or a warehouse/premises from where duty was paid. Appeal of the appellant on this account is thus required to be allowed. On the issue of inclusion of inspection charges in the assessable value, it is observed that the same are not mandatory inspections during the manufacture of the goods. A specific mention has been made by the first appellate authority in para 8.1 of the Order-in-Appeal dated 30/11/2006 that these additional inspections are got done at the instance of the buyers and is not mandatory. Commissioner of Central Excise, Mysore Vs. M/s. TVS Motors Company Ltd. (2015 (12) TMI 874 - SUPREME COURT ) also held that pre-delivery inspection charges cannot be included in the assessable value. In view of the above observations and settled proposition of law, optional inspection charges at the instance of buyer cannot be included in the assessable value under Section 4 of the Central Excise Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority has wrongly observed in para 8.2 of the order-in-Appeal dated 30/11/2006 that 'place of removal ' under Section 4 (3) (c) also include a premises where goods are sold. It was her case that the said amendment was carried out in Section 4 (3) (c) only with effect from 14.5.2003. That as per Rule 5 of the Central Excise Valuation (Determination of price of Excisable goods) Rules, 2000, the cost of transportation to the place of removal is required to be excluded from the transaction value. Learned Advocate relied upon the case law of Apex court in Commissioner of Customs Commissioner of Customs, Nagpur Vs. M/s. Ispat Industries ltd. - 2015-TIOL-238-SC-CX 3.2 It was also argued on behalf of the appellant that freight and insurance is charged separately in the invoices and the goods are sold at the factory gate which was the place of removal at the relevant time as per Section 4 (3) (C) of the Central Excise Act, 1944. 4. Shri pawan Kumar Singh, Supdt. (A.R.) appearing for the Revenue argued that inspection of the goods is done in the factory of the appellant before clearance and the contract is on FOR destination basis, therefore, not only the inspection cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 transportation is charged to the buyer in addition to the price for the goods and shown separately in the invoice for such excisable goods. 6.3 As per the definition of 'place of removal' extracted above, given in Section 4 (3) (c) at the relevant time was a factory or any other place or premises or a warehouse wherein the excisable goods have been permitted to be deposited without payment of duty. There is no mention of place of sale of the goods in Section 4 (3) (c) during the relevant time. It has to be held that place of removal is the factory or a premises from where duty is paid and not where the goods are sold. The words, like ''a depot, premises of consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory were not existing in Section 4 (3) (6) during the relevant period. Further Rule 5 of the Valuation rules, 2002 also provide that cost of transportation from the place of removal to the place of delive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be excluded for the purposes of determining the value of the excisable goods, 23. It is clear, therefore, that on and after 14.5.2003, the position as it obtained from 28.9.1996 to 1.7.2000 has now been reinstated. Rule 5 as substituted in 2003 also confirms the position that the cost of transportation from the place of removal to the place of delivery is to be excluded, save and except in a case where the factory is not the place of removal. 24. It will thus be seen that, in law, it is clear that for the period from 28.9.1996 up to 1.7.2000, the place of removal has reference only to places from which goods are to be sold by the manufacturer, and has no reference to the place of delivery which may be either the buyer's premises or such other premises as the buyer may direct the manufacturer to send his goods. As a matter of law therefore the Commissioner's order and Revenue's argument based on that order that freight charges must be included as the sale in the present facts took place at the buyer's premises is incorrect. Further, for the period 1/7/2000 to 31/3/2003 there will be no extended place of removal, the factory premises or the warehouse (i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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