9911796707
TMI Blog2024 (8) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... r, advertising or publicity, marketing and selling, organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. The Hon ble Supreme Court in the case of Purolator India Ltd. [ 2015 (8) TMI 1014 - SUPREME COURT] has held that ' Section 4(2) pre-2000 made it clear that where the price of excisable goods for delivery at the place of removal is not known, and the value thereof is determined with reference to the price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery is to be excluded from such price.' Hon ble Supreme Court in the case of CCE, Pondicherry vs. Acer India Ltd. [ 2004 (9) TMI 106 - SUPREME COURT] wherein it has been held that only because the expression, by reason of sale, or in connection with the sale has been used in the definition of transaction value , the same by itself would not take away the rigors of charging section. Thus, the demand of duty in respect of third party inspection charges cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as tabulated in Para No.33 above for the period from May 2012 to Sep 2016 should not be demanded and recovered from them under proviso to Sub-section (4) of Section 11A of Central Excise Act, 1944 and the Cenvat duty amounting to Rs.50,706/ deposited from PLA vide entry No.05 dated 23.06.2016 may not be appropriated towards their liability on short found finished goods and rest of the duty may not be appropriated from the amount of Rs.50 Lakhs already deposited on 23.06.2016. ii. the wrongly availed and utilized Cenvat credit amounting to Rs.11,313/- [Rupees Eleven Thousands Three Hundred Thirteen Only] (Central Excise duty: Rs.11,123/- + Education Cess: Rs.127/- + Secondary Higher Education Cess: Rs.63/-) should not be demanded and recovered from them under proviso to Sub- section (4) of Section 11A of Central Excise Act, 1944 read with Rule 14 of Cenvat Credit Rules, 2004 and the Cenvat credit amounting to Rs.11,313/- already debited vide RG23-A Pt-II Entry No.491 492 both dated 31.03.2017 may not be adjusted towards their liability. iii. interest at the appropriate rate on delayed payment of duty should not be charged and recovered from them in respect of Central Excise duty amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2017. I also order to appropriate the Cenvat duty amounting to Rs.50,706/- deposited from PLA vide entry No.05 dated 23.06.2016. I further order to appropriate the Cenvat duty Rs.43,026/- deposited by the party vide challan No.00012 dated 22.06.2017. Since the party has also already deposited Rs.50 Lakhs on 23.06.2016, I therefore order to appropriate the remaining duty from the amount of Rs.50 Lakh already deposited by the party on 23.06.2016. ii. I hold that they wrongly availed and utilized Cenvat credit amounting to Rs.11,313/- [Rupees Eleven Thousand Three Hundred Thirteen Only] (Central Excise duty: Rs.11,123/- + Education Cess Rs.127/- + Secondary Higher Education Cess: Rs.63/-), and hence order to recover from them under proviso to Sub-section (4) of Section 11A of Central Excise Act, 1944 read with Rule 14 of Cenvat Credit Rules, 2004 read with Section 14: and Section 174 of the GGST Act, 2017. Since they had already deposited the entire Cenvat credit amounting to Rs.11,313/- already debited vide RG23-A Pt-II Entry No.491 492 both dated 31.03.2017 hence order to adjust towards their liability. iii. I order to recover the interest at the appropriate rate on delayed pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- DISCUSSION FINDINGS: 6. I have gone through the case record. Several issues are involved in this appeal and the same are taken up separately as under:- (i) Cost of Transportation: The freight amount has been shown separately in the invoice and collected from the buyer. The appellant argues that the place of removal is factory gate and the transportation has been arranged at the request of the buyer, therefore, as per rule 5 of Central Excise Valuation Rules 2000, freight is not includible in the assessable value. This argument has merits. The said rule clearly provides for exclusion of cost of transportation from the place of removal upto the place of delivery Thus, demand of duty on the freight is not sustainable. (ii) Third Party Inspection Charges: As recorded in Para 12.2 of the SCN, the buyer had put the condition that the goods shall be dispatched only after inspection, test certification and marking by Third Party Inspection Agency. Thus, sale is subject to such inspection. The inspection charges are, therefore, includible in the transaction value by virtue of definition of Transaction Value under section 4 of CEA 1944. (iii) Supply of Sockets: The sockets are suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessable value as held by Hon'ble Tribunal in the case of ITI LIMITED, reported at 2017 (349) ELT 149 (Tri-All) The ratio of this decision is applicable to the instant case. Therefore, demand on this count is not sustainable. Thus, only demand of duty mentioned at S. No. 1,3,4 8 of the Table in Para2 above (Total amounting to Rs.499078/-) along with interest is upheld and the rest of demand is set aside. 7. Penalty: As mentioned in Para 49 of the impugned order, the appellant has already deposited rupees fifty lakhs on 23.6.2016. Also, Rs.50706/- was deposited on 23.6.2016 and Rs.43026/- was deposited on 29.6.2017. As entire duty along with interest stands paid before issuance of SCN dated 05.6.2017, penalty of only 15% of the duty confirmed is imposed on the appellant under section 11AC(1)(d) of the said Act. 8. Regarding penalty on availment of undue Cenvat credit, it is apparent from record that the said undue credit amounting to Rs.11,313/- was reversed along with interest on 31.3.2017 i.e. before issuance of the SCN. Therefore, penalty of only 15% of the said undue Cenvat credit is imposed on the appellant under rule 15 of CCR, 2004 read with section 11AC(1)(d) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r only such amounts, which the buyer is liable to pay, or on behalf of assessee, whereas in the present case, third party inspection charges has not been paid by the buyer on behalf of the Appellant but on its own behalf; (iii) Furthermore, merely because sale is subject to inspection, the same would not include the third party inspection charges in the transaction value as the same were paid to inspection agency not on behalf of the Appellant but because of the condition put by the buyer himself. Reliance in this regard is also placed on the judgement of Hon ble Supreme Court in the case of CCE, Pondicherry vs. Acer India Ltd. 2004 (172) E.L.T. 289 (S.C.) wherein it has been held that only because the expression by reason of, or in connection with the sale has been used in the definition of transaction value , the same by itself would not take away the rigors of charging section. 5. He further relied upon the judgement of Hon ble Supreme Court in the case of Purolator India Ltd. vs. CCE, Delhi 2015 (323) E.L.T. 227 (S.C.). Learned Advocate further submits that as regards Sr. No.3 regarding loose slips, the demand has been confirmed in the impugned order on the ground that the Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Advocate as regards the transaction value definition, it is settled principle that basic feature of Section 4 has never changed even after the two amendments. Thus, the definition of transaction value after amendment, means the price actually paid or payable for the goods, when sold, and include in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling, organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. We further find that the Hon ble Supreme Court in the case of Purolator India Ltd. (supra) has held as under:- 14 . It can be seen that the common thread running through Section 4, whether it is prior to 1973, after the amendment in 1973, or after the amendment of 2000, is that excisable goods h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with sales tax. They have different connotations and apply in different situations. Central excise duty is chargeable on the excisable goods and not on the goods which are not excisable. Thus, a goods which is not excisable if transplanted into a goods which is excisable would not together make the same excisable goods so as to make the assessee liable to pay excise duty on the combined value of both. Excise duty, in other words, would be leviable only on the goods which answer the definition of excisable goods and satisfy the requirement of Section 3. A machinery provision contained in Section 4 and that too the explanation contained therein by way of definition of transaction value can neither override the charging provision nor by reason thereof a goods which is not excisable would become an excisable one only because one is fitted into the other, unless the context otherwise requires. 11. By respectfully following the ratio as laid down by the Hon ble Supreme Court, the demand of duty in respect of third party inspection charges cannot be sustained and is accordingly set aside. 12. Further as regards the issue No.3 we find that the demand in the present case has been confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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