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TMI Blog2021 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... ansportation costs separately nor were such charges recovered separately from the buyers The invoices issued by the assessee incorporated details of the relevant purchase orders issued by the buyers and as the agreed upon price was as per FOR destination, there was no reason to charge any freight component separately. Under the Act, as per definition of sale, sale takes place only upon transfer of the possession of the goods by the manufacturer to the buyer, which occurred in the present cases at the buyers premises - in the present case, the parties intended that the sale of goods would take place at the premises of the buyers and that such premises would be considered to the Point of Sale, where the title and property in the goods were actually transferred. Invocation of Rule 5 of the Valuation Rules, 2000 by the Revenue - HELD THAT:- Invocation of this rule is misplaced. The said Rule applied to cases only where goods were sold at the place of removal but were to be delivered elsewhere, which condition could not have applied in the given facts and circumstances. The assessee s case fell within the purview of the exception to the aforesaid Rule 5. On the other hand, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt as per the laws prevailing then duly supported by the CBEC clarifications at relevant point of time. The appeals filed by the assessee are allowed and the appeals filed by the Revenue are dismissed as withdrawn under the National Litigation Policy. - Excise Appeal Nos. 187, 188 of 2010, 700, 776 of 2011, 75148, 75149, 75150 of 2015, 190 of 2010, 777, 779 of 2011, 185 of 2010, 778 of 2011 - FINAL ORDER NO. 75502-75513/2021 - Dated:- 27-8-2021 - SHRI P.K. CHOUDHARY, MEMBER (JUDICIAL) AND SHRI RAJU, MEMBER (TECHNICAL) Shri J.P.Khaitan, Senior Advocate, Soumya Kejriwal, Indranil Banerjee, Ms.Poulami Sikdar, Nihar Dasgupta, N.K.Chowdhury, Advocates for the Appellant (s)/Assessee (s) NONE appeared for Sl.No (ix) above. Shri K.Chowdhury, Authorized Representative for the Respondent (s)/ Revenue ORDER The present appeals involving identical questions of law are taken up together for disposal for the sake of convenience, out of which, four appeals have been filed by the assessees, namely, (i) M/s RNB Carbides Ferro Alloys Pvt. Ltd., (ii) Nezone Alloys Ltd (iii) Meghalaya Carbide Chemicals Pvt. Ltd., while the remaining eight appeals have been filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Period Involved Amount refunded/ demanded 1. C. No.V-CH-72/3/ADJ/2008 dated 15.05.2008 (in respect of assessee s Unit I) April, 2006 to August, 2007 ₹ 7,29,752/- 2. C. No.V-CH-72/4/ADJ/2008 dated 15.05.2008 (in respect of assessee s Unit II) April, 2006 to August, 2007 ₹ 26,20,403/- 3. C. No.V-CH-72/15/ADJ/2013 dated 12.09.2013 (in respect of assessee s Unit II) January, 2012 to December, 2012 ₹ 5,54,219/- 4. C. No.V-CH-72/9/ADJ/2011 dated 17.02.2012 (in respect of assessee s Unit I) September, 2007 to March, 2008 and April, 2008 to March, 2009 ₹ 7,28,666/- 5. C. No.V-CH-72/10/ADJ/2011 dated 17.02.2012 (in respect of assessee s Unit II) September, 2007 to March, 2011 ₹ 38,06,432/- The larger period of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al as defined under Section 4 of the said Act had to be determined with reference to the Point of Sale, which in the assessee s case was always the buyer s premises. Sri Khaitan invited the attention of the Bench to the relevant contracts/ purchase orders and transit insurance policies. It was contended that the terms of the aforesaid contracts/purchase orders clearly prove that: (i) all sales were at FOR destination prices; (ii) Ownership of goods and the property in the goods passed onto the buyers upon delivery of the said goods to the respective premises in acceptable condition. The goods were inspected and accepted only upon satisfaction of the buyers; (iii) the assessee bore the risk of transit loss or damage during the course of journey to the destination; (iv) the assessee was obliged to deliver the goods at the buyer s premises and price was paid only if the goods were accepted. The attention of the Bench was drawn to the documents relating to rejection of goods by the buyers in the Paper Book to Appeal No. 188 of 2010, which showed that on rejection of goods, the assessee collected the same from the buyer s premises and brought them back to its factory at i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven transit damage/ breakage was on the assessee s account which indicated that till the goods reached the destination ownership remained with the seller-assessee. Sale, thus, took place upon delivery at the buyers premises. This principle of law has been recognized by and re-iterated in the decision of Commissioner of Central Excise, Mumbai-III versus EMCO Limited reported in 2015 (322) ELT 394 (SC). The relevant portion of the judgment in case of Roofit Industries (supra) is reproduced below: ..9 . If the goods are cleared at the factory gate, then the Excise duty has to be charged on the valuation of the goods to be arrived at the factory gate as that would be the place of removal of goods. It would mean that the expenses which are incurred after the removal of goods from the factory gate namely freight, insurance and unloading charges, etc., are not to be included in the valuation of the goods for the purposes of Excise duty. The reason is that the sale of goods to the buyer is at the factory gate when the property passes to the buyer and the aforesaid expenditure are thereafter incurred by the buyer. It is this aspect which was gone into by this Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee in the instant case had correctly determined the assessable value by including the disputed transportation cost. In this regard, reliance was placed on Circular No. 1065/4/2018-CX dated 08.06.2018, which stated that in case of a contract providing FOR sale, assessable value had to be determined by including all costs upto the point of sale, which was the buyers premises. The relevant portion of the decision in Ispat Industries (supra) is reproduced below: .. 31. With this we come to two recent judgments of this Court. In CCE Customs v. Roofit Industries Ltd., 2015 (319) E.L.T. 221 (S.C.), this Court, after distinguishing the Escorts JCB s case, stated :- The principle of law, thus, is crystal clear. It is to be seen as to whether as to at what point of time sale is effected, namely, whether it is on factory gate or at a later point of time, i.e., when the delivery of the goods is effected to the buyer at his premises. This aspect is to be seen in the light of the provisions of the Sale of Goods Act by applying the same to the facts of each case to determine as to when the ownership in the goods is transferred from the seller to the buyer. The charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. (3) Unless a different intention appears, the rules contained in Sections 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. These are clear finding of facts on the aforesaid lines recorded by the Adjudicating Authority. However, CESTAT did not take into consideration all these aspects and allowed the appeal of the assessee by merely referring to the judgment in Escorts JCB Ltd. [(2003) 1 SCC 281 : (2002) 146 E.L.T. 31] Obviously the exact principle laid down in the judgment has not been appreciated by CESTAT. [at paras 12-15] 32. It will be seen that this is a decision distinguishing the Escorts JCB s case on facts. It was found that goods were to be delivered only at the place of the buyer and the price of the goods was inclusive of transportation charges. As transit damage on the assessee s account would imply that till the goods reached their destination, ownership in the goods remained with the supplier, namely, the assessee, freight charges would have to be added ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Montage Enterprises Pvt. Ltd. v. Commissioner of C.Ex ST, Jammu reported in 2018 (364) ELT 1003 (Tri-Chan.) and Aditya Birla Chemicals India Ltd vs. CCE, Ranchi 2021-TIOL-48-CESTAT-KOL in support of his arguments. He also submitted a written submission and reiterated the findings of the lower authorities. 10. Heard both sides through video conferencing. 11. We have carefully gone through the appeal records and submissions made by both sides including the written submissions. We find that the present dispute falls within a narrow compass as to whether the assessee had correctly availed the benefit of Notification No. 32/99-CE dated 08.07.1999 and if not, then whether the revenue was entitled to recover the refunds already granted claiming it to be a case of erroneous refund . 12. It has not been disputed that the contracts executed by the assessee were FOR contracts. We note that the contracts/ purchase orders specified door delivery at all-inclusive prices. The purchasers reserved the right to inspection and to not accept the goods, in case the goods supplied were found to be sub-par. The assessee bore the risk of loss or damage to the goods during transit to the dest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll charges upto the place of sale are includible, including freight, etc. 16. The ld. Senior Counsel further contended that even if it be assumed that the assessee had paid higher Central Excise duty than was leviable, the Department was not at liberty to retain any part of such excess amount collected as duty. It is pertinent to note that the basic purpose and object of the notification in question was to promote industrialization in the north-eastern part of the country. We observe that the revenue can retain only those sums which represent the actual duty leviable under a statute and therefore, any excess amount collected as duty ought to be refunded. 17. The assessee has further placed reliance on Board s Circular No.59/1/2003-CX dated 03.03.2003 and Circular No. 988/12/2014-CX dated 20.10.2014. 18. The aforesaid circulars state that place of removal/ assessable value was ascertainable with reference to the place where the sale took place or where the property in the goods passed from the seller to the buyer in terms of the Sale of Goods Act, 1930. Therefore, where the terms and conditions of sale in the relevant contracts/ purchase orders unambiguously stipulated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f time. The facts in that instant case, in essence, were that the assessee had paid the duty by including freight amount. Considering the judgment of the Hon ble Supreme Court in Ispat Industries case (supra), the duty paid on freight was legally not payable. So the duty amount paid legally as well as the amount legally not payable but paid, both were entitled for refund if the refund claim was filed as per law. Hence, the Tribunal was conscious of the view taken in Nalari Ferro Alloys case, that even if the duty was legally not payable on the portion of freight which was subsequently held not includible, the same was entitled for refund of claim was filed as per law. Therefore, the decision in the case of Aditya Birla Chemicals India (Supra) relied by the Revenue do not advance their case. 21. Looking from a perspective altogether different from the case of valuation of excisable goods, the entire proceedings in the instant case mainly relate to the recovery of amount already refunded claiming the same to be a case of erroneous refund under Section 11A of the Act. The whole basis of the Revenue that freight amount is not includible in the assessable value, as has subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Cane Industries v. Commissioner of Taxes and Ors., reported in 2001 SCC Online Gau 216 : (2002) 2 GLR 69, held that simply because the law has changed or earlier law laid down has been reversed, it would not entitle the revisional authority to reopen the earlier assessments .. 47 . Another Division Bench Judgment of this Court rendered similar findings in the case of Mahabir Coke Industries, reported in (2007) 4 GLR 515. It was held that even if subsequently the law is changed or reversed, the assessments already completed cannot be allowed to be opened as the law covering the field relating to exemption of tax to a new Industry at the time of passing of the order of assessment to be considered . In the present case also, the Department by relying on the subsequent decision of the Supreme Court in Ispat Industries has proceeded to take a view that freight amount can never be included in the assessable value. In our view, the refund already sanctioned cannot be termed as erroneous refund more so in view of the fact that refund has been duly sanctioned by the Department as per the laws prevailing then duly supported by the CBEC clarifications at relevant point of ti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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