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TMI Blog2024 (6) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... ace at appellant s factory gate only. In view of the Section 19 of the Act, it is clear that in case of sale of specific or ascertained goods, property in those goods gets transferred when the parties intent for so which has to be inferred from the conduct of the parties and terms of the contracts - The transporter had issued consignment notes mentioning the buyer as the consignee. It stands absolutely clear that the intent to transfer the property was at the time of clearance of goods from the appellants/the manufacturer s premises. The Hon ble Supreme Court earlier also in the case of ESCORTS JCB LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DELHI-II [ 2002 (10) TMI 96 - SUPREME COURT] had held that since the sale of goods is at the ex works of the assessee and handing over such goods to the transporter is deemed to be the delivery to the buyer in terms of provisions of Sale of Goods Act, the transaction between the assesse and its buyer got completed at the factory gate of the assessee and the place of removal would be the factory premises only. Based on these observations, the freight as well as transit insurance amount shown and charged separately in the invoices is held to not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that the freight and insurance were agreed to be inclusive in the transaction value. However, the appellant while discharging the tax liability, on those invoices, was found to had not included the cost of freight while assessing the said value. Resultantly, excise duty amounting to Rs.65,15,338/- on the freight value of Rs.5,21,22,700/-received by the appellant during the period from March 2016 to March 2017 is alleged to have been short paid by not including the same into the assessable value. The same is alleged to be the violation of Section 4 of Central Excise Act, 1944 read with Rule 4,6 and 8 of Central Excise Act, 2002. The said amount of Rs.65,15,338/- therefore is proposed to be recovered from the appellant along with the interest vide Show Cause Notice No. 35/2017/51 dated 16.04.2018. Penalty is also proposed to be imposed. The said proposal was initially confirmed vide Order-in-Original No. 01/2021-22 dated 17.05.2021. The appeal against the said order has been dismissed vide the order under challenge. Being aggrieved the appellant is before this Tribunal. 2. We have heard Ms. Sukriti Das, learned Advocate for the appellant and Shri Manish Kumar Chawda, learned Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be essential in each case of removal of excisable goods to determine the point of sale . The another Circular No. 988/12/2014 dated October 20,2014 is also impressed upon wherein it has been clarified that place of removal needs to be ascertained in terms of provisions of Central Excise Act, 1944 read with provisions of Sale of Goods Act, 1930. Payment of transportation, inclusion of transport charges in value, payment of insurance or who bears the risk are clarified to not to be the relevant considerations to ascertain the place of removal. Resultantly, the place of sale is clarified to be the place of removal. Since in delivery on FOR destination basis, the sale gets concluded at buyer s place; buyer s place is the place of removal. The cost of freight while delivering the goods to the said place of sale has to be included in the assessable value as has been held by Commissioner (Appeals). Impressing upon no infirmity in the order under challenge, the appeal is prayed to be dismissed. 5. Having heard the rival contentions and perusing the records, we observe that the issue to be adjudicated in the present case is: Whether the value of freight and insurance charges should be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision has subsequently been followed by Hon ble Supreme Court in the case of Ispat Industries (supra)which has squarely covered the controversy before us. It has been held that freight and transit insurance should not be included in the assessable value for the purpose of payment of excise duty because the term any other place under the definition of place of removal has reference only to the places from which goods are to be sold by the manufacturer. It has no reference to the place of delivery which may be the buyer s location. This decision has overruled its earlier decision in the case of Roofit Industries Ltd.(supra) by appreciating that attention to Section 4 as originally enacted and as amended demonstrating that buyer s premise cannot be the place of removal, was not drawn before the court. 8. Reverting to the facts of the present appeal, we observe that there was an agreement between the appellant and its buyers according to which prices were agreed to be on ex work basis as also have been mentioned in the invoices. The goods admittedly got cleared from the factory of appellant on payment of appropriate sales tax. Invoice were prepared at the factory gate only in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... livery of the goods to the buyer. 11. These provisions are sufficient to hold that the findings in the order under challenge, that delivery on FOR destination basis has changed the place of removal from factory to the buyers place are apparently wrong and are contrary to the decision of hon ble Supreme Court. The Hon ble Supreme Court earlier also in the case of Escort JCB Ltd. Vs. Commissioner of Central Excise, Delhi reported as 2002 (146) ELT 31 (SC) had held that since the sale of goods is at the ex works of the assessee and handing over such goods to the transporter is deemed to be the delivery to the buyer in terms of provisions of Sale of Goods Act, the transaction between the assesse and its buyer got completed at the factory gate of the assessee and the place of removal would be the factory premises only. Based on these observations, the freight as well as transit insurance amount shown and charged separately in the invoices is held to not to be includable in the assessable value. We also place reliance on another decision of Hon ble Supreme Court in the case of Commissioner of Central Excise, Noida Vs. Accurate Meters Ltd. reported as 2009 (235) ELT 581 where the freight ..... X X X X Extracts X X X X X X X X Extracts X X X X
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