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TMI Blog2022 (12) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... wing two types: (i) Clearance to their depots and consignment agents, from where the goods are sold; (ii) Clearance to industrial users and bulk consumers which were delivered on Free On Road (FOR) basis. 3. Scrutiny of records by Revenue pertaining to sales and supplies of cement dispatched to bulk consumers / industrial users, it was observed that they were selling their goods on FOR basis dispatched by road including packing, forwarding and unloading charges and also including the cost of freight charges. It appeared to the Revenue that the assessee are supplying the final products to the customers' destination/address i.e. at various delivery places as stipulated in the agreement/ purchase order. It was further observed that cost of transportation incurred from the factory to the place of removal (destination) was not included for arriving at the 'assessable value' during the relevant period, and thereby it appeared that the assessee have short paid the Central Excise duty on such goods. Appeal No. E/30164/2019 (By assessee) 4. Show Cause notice dated 5.9.2018 was issued (Mallacheruvu works, C.E. Regn. No. AABCM9480CXM001) proposing to demand Central Excise duty on the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place at the factory gate of the assessee but at the place of buyer on the delivery of goods. It was further observed that as per section 19 of the Sale of Goods Act, property in goods, in effect, passes to the buyer only at the buyer's premises on its delivery. It was further observed that the assessee have paid VAT/ Sales Tax on the price which is inclusive of the cost of transportation. This fact also indicates that in fact the sale took place at the buyer's premises. It was further observed that under section 20 of the Sale of Goods Act, it is provided - "Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed". Further it was observed that in the facts of the present case, the contract were not unconditional, as there are conditions specified for acceptance of the goods. The fact in the present case 'deliverable state' of goods, arises only at the time of safe delivery of goods at the customers' premises specified in the purchase order. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Act. Being aggrieved the appellant is in appeal. 9. Learned Counsel inter alia urges that the issue for determination is to determine the 'place of removal' in terms of section 4 (3) (c ) (iii) of the Act, read with section 4(1)(b) of the Act and explanation to Rule 5 of Central Excise (Determination of Price of Excisable Goods), Rules 2000 for the purpose of arriving at the transaction value. 10. The place of removal is the factory gate of the appellant as per the appellant, and it is the premises of the Customers, where the delivery of goods have been made, as per the Revenue. That the Board had issued a clarification by its clarificatory Circular dated 8.6.2018 referring to its earlier Circular(s) with respect to the subject 'place of removal' under section 4 of the Act, the CENVAT Credit Rules and drawn attention to the four judgment of the Apex Court namely; 1. Roofit Industries Ltd. [2015 (319) ELT 221(SC)] 2. CCE vs Ispat Industries Ltd. [2015 (324) ELT 670 (SC)]; 3. CCE, Mumbai III vs Emco Ltd. [2015(322) ELT 394 (SC)] 4. CCE & ST vs Ultra Tech Cement Ltd. [2018(9) GSTL 337 (SC)] The Board rescinded its earlier Circular No. 988/12/2014-CX. dated 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he seller till goods are accepted by buyer on delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal. The said circular further provides that the guidelines and the judgment of Apex Court may be referred to and based on facts and circumstances of each case. Further provides past cases should be accordingly decided. 12. Learned Counsel further urges that the facts of the present case are squarely covered by the principle laid down by the Hon'ble Sup. Court in the case of Ispat Industries Ltd. (supra). With effect from 14.5.2003 section 4 was again amended so as to re-include sub-clause (iii) of old Section 4(3)(b) (pre 2000). The amended Section 4(3)(c)(iii) reads as follows :- "(3)(c)(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;" Further, Rule 5 of the Central Excise Valuation Rule was also substituted, with effect from 1-3-2003, and read as follows : "Rule 5. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled that the buyers' premises can never be the place of removal, therefore the freight from the factory/depot/consignment agent up to the buyers' premises cannot be included in the assessable value, even if the goods are sold or delivered at the buyer's premises. In view of the above, we find that the settled legal position is in favour of the appellants and against Revenue and the demands are unsustainable on merits and need to be set aside and we do so. Since we have taken a decision on the merits of the case, the issue of limitation becomes irrelevant." Further, a similar view was taken in M/s. Vijai Electricals Ltd., Vs. Commissionerate [2019 (11) TMI 301- CESTAT]. 15. Similar view was also taken up by the CESTAT Ahmedabad Bench in the case of Commissioner of Central Excise, Mumbai-IV Vs Emco Ltd. [2016 (12) TMI 1385-CESTAT MUMBAI] and M/s. Savita Oil Technologies Ltd., Vs. C.C.E. & S.T., Daman [2022 (7) TMI 138- CESTAT Ahmedabad]. 16. It is further urged that Hon'ble Supreme Court in the case of Ispat Industries Ltd. (supra), have clarified that 'place of removal' are the manufacturers' premises (factory or warehouse or the premises of the consignment agent). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Roofit Industries, have held that the place of removal referred to in Section 4 r/w Rule 5 and Rule 7 of Central Excise Valuation Rules, clearly indicates, that the place of removal refers to only the sellers premises (factory gate, warehouse, depo, consignees premises). It is nowhere stated that the buyer's premises can be place of removal. Hon'ble Apex Court also observed that in the Roofit case, it did not have occasion to examine the provisions of Section 4, since it was enacted and amended from time to time in the Central Excise Act r/w the Valuation Rules. After examining Section 4 r/w the rules, the Apex Court observed that the cost of transportation from the place of removal up to the place of delivery of excisable goods is excluded from 'Assessable value' for the computation of excise duty. 19. In view of aforementioned observations and findings, we allow this appeal and set aside the impugned order. Appeal No. E/30214/2020 (by revenue with cross objection by the assessee CO No. 30149/2020). 20. The period involved in this appeal is from August 2016 to July 2017 and is related to Mulla Kalapalli Works Vizag (CER Registration AABCM9480CXM002). 21. Under similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y calculating the assessable value for sales made to institutional buyer's on FOR destination basis. Admitted fact is that as per the various purchase orders, the price is inclusive of freight element, as well as taxes in most of the cases. The appellant have cleared the goods from their factory to the institutional buyer's by raising the excise invoice, wherein, the amount of freight has been separately shown. The appellant (Vijag Unit Regn. No. AABCM9480CXM002) was regularly filing their returns and paying the admitted amount of duty (without including the freight). 25. Based on the Audit observations made in Letter C. No. V/1/286/2014-Audit Gr.I dated 07.04.2015 issued by the Superintendent (Audit), Group-I, Kakinada Circle, from the Office of the Asst. Commissioner of Central Excise & Service Tax, Audit Commissionerate, Kakinada Circle to provide the details of differential duty liability i.r.o. clearances made to depots for the period from 17.03.2012 to 31.12.2014 and details of POs, details of freight i.r.o. the FOR clearances made during the period from 17.03.2012 to 31.12.2014. In response, the Appellant vide letter dated 24.11.2015 informed the Asst. Commissioner of Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,09,24,327 37,96,301 4,23,81,640 28. Upon verification of above refund claim, the Appellant were issued a Deficiency Memo vide letter C. No. V/18/454/2016- Refund (My Home) dated 25.08.2016 and a reminder letter asking them to furnish certain documents/information, etc. observing the following discrepancies/deficiencies. (i) Audit note issued was in the nature of communicating tentative observations of audit seeking their view points and requesting to pay the liability, if agreeable. Further the audit has not quantified the duty liability and only called for relevant documents for the period from 17.03.2012 to 31.12.2014. Therefore, the assessee's contention that the subject amounts are paid pursuant to the directions of audit appears to be incorrect. (ii) Assessee had not provided any worksheets for payment of differential duty. Also, no copies of relevant invoices purchase orders, transport bills, etc., were enclosed. (iii) As per Certificate dated 30.05.2016 of Chartered Accountant, the amounts claimed as refund are shown in their books of accounts under Excise Duy Receivable Account. However, no supportive documents in this regard were enclosed. 29. Thereafter, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue also filed cross-appeal against the said order, on the ground that-on the audit intervention, the Appellant had suo-moto paid Rs. 2,55,27,656/- as CE duty with interest Rs.1,10,23,634/- and reduced penalty Rs. 38,29,149/- and vide Letter dated 22.12.2015, admitted the non-inclusion of freight charges in the assessable value was a mistake on their part and requested to drop further proceedings. Since the proceedings are deemed to have been closed under Section 11AC(d), thus the Appellant does not have right to claim any consequential refund. 32. Thereafter, the Appellate Commissioner vide Order-in-Appeal Nos. 093-094-18-19 dated 28.09.2018, concurring with the findings of the Adjudicating Authority on merits held- the freight is liable to be added to the transaction value for the purpose of levy and payment of Central Excise duty and the 'place of removal' in this case is not Appellant's factory gate, but the buyer's premises. Further Appellate Commissioner also allowed the grounds raised in the cross-appeal filed by the Revenue, that amounts paid voluntarily by the Appellant due to audit intervention for dropping the proceedings, are concluded in terms of Section 11AC(d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point of the assessee and requesting to pay the duty/liability, if agreeable. Further, audit had not quantified the duty liability and had only called for the relevant documents for the period from 17.03.2012 to 31.12.2014. 36. Thus, the amounts paid towards duty/interest/penalty still remains to be 'Revenue deposit', since no SCN was issued for appropriating the said amounts and/or no letter for conclusion of the proceedings in respect of amounts paid towards the levies (short paid) was issued. Accordingly, the refund amounting to Rs. 1,04,33,389/- invoking time limit under Section 11B of the Act, cannot be sustained. In this reference, the Appellant rely upon the following decisions: * Monnet International Ltd. Vs. Commissioner of C. Ex., New Delhi - 2017 (3) G.S.T.L. 380 (Tri. - Del.) * SafexElectromech (P) Ltd. Vs. Commissioner of C. Ex., Ahmedabad-I - 2019 (27) G.S.T.L. 535 (Tri. - Ahmd.) * Nirlep Alliances Ltd. Vs. Commissioner of Central Excise, Aurangabad - 2018 (362) E.L.T. 915 (Tri. - Mumbai) * Maheshraj Chemicals Pvt. Ltd. Vs. Commissioner of C. Ex., Ahmedabad - 2015 (317) E.L.T. 366 (Tri. - Ahmd.) 37. It is further urged that the show cause notice dated 28.11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmitted in law, is also based on incorrect facts. 39. Further, the ground taken by the revenue of closure of the matter, is also bad in law as Section 11AC (1)(d) provides for payment of interest and 15% penalty, within 30 days from the date of issue of SCN, and only then the proceedings resting with such SCN is deemed to be concluded. In absence of any show cause notice, Section 11Ac (1)(d) has got no application. 40. It is further urged that, if the amounts paid are towards conclusion of the proceedings, as claimed by the Revenue, then the amounts of Rs.90,12,460/-, Rs.15,80,735/- and Rs.13,51,869/- paid towards duty, interest and penalty, respectively, totally amounting to Rs. 1,19,45,064/ alone have to be considered, and not the entire refund claim amounting to Rs. 4,23,81,640/-. 41. The learned AR for revenue relies on the impugned order, he further states that evidently department have not quantified any demand in the audit letter dated 07/04/2015. Only relevant details were called for, the appellant as per their own understanding have quantified the demand of duty (short paid) alongwith interest and further paid penalty on being so advised by the department, thus it is th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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