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TMI Blog2024 (8) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... ment' clause contained in the procurement order, 100% payment for the supplies was to be made by the purchaser after the receipt and verification of material. Thus, there was no money given earlier by the buyer to the assessee and the consideration was to pass on only after the receipt of the goods which was at the premises of the buyer. From the aforesaid, it would be manifest that the sale of goods did not take place at the factory gate of the assessee but at the place of the buyer on the delivery of the goods in question.' It is not disputed that the appellant had collected the amount towards freight from the customers but have not included the same in the transaction value and hence, no central excise duty was paid on the said amount. The ownership of the goods was to be transferred at the buyers premises, where the sale actually took place and, therefore, the place of removal for the purpose of valuation under Section 4 was the buyers premises - The facts clearly show that the point of sale was where the ownership of goods was transferred to the buyers or customers, and, therefore, all the expenses incurred and collected by the appellant till the buyers premises shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 - SUPREME COURT] , yet the appellant resorted to unlawful deduction of freight from the assessable value. Thus, they are liable to pay penalty under Section 11 AC of the Act which the Commissioner (Appeals) has reduced to 25%. Accordingly, the same is upheld. Appeal dismissed. - MS. BINU TAMTA, MEMBER (JUDICIAL) AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri R.K. Ambwani, Consultant for the appellant Shri M.K. Chawda, Authorised Representative for the respondent ORDER M/s. H.D. Wires Pvt. Ltd. [The Appellant] has challenged the order-in-appeal no.IND-EXCUS-000-APP-82-2023-24 dated 27.06.2023 passed by the Commissioner (Appeals), whereby the demand of excise duty along with interest and penalty was confirmed though the same was dropped by the Adjudicating Authority. 2. During the course of departmental audit of the records of the appellant, it was observed that the appellant had collected amount in the name of freight from their customers, but have not included the same in transaction value and no central excise duty on such amount was paid by the appellant. It was also observed that the appellant was paying service tax under reverse charge on such freight amount paid to the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale on FOR contract basis. He, therefore, submitted that the sales made by the appellant being on FOR basis, the freight charges of outward transportation of goods should have been included in the assessable value of goods for the purpose of discharging central excise duty. 7. Heard both the sides and perused the records of the case. 8. The issue considered in the impugned order was whether the freight charges paid for transport of goods from the premises of the appellant to their customers premises on FOR basis shall be included in the assessable value of goods for the purpose of charging central excise duty. That similar issue was considered by the Apex Court in CCE Vs. Roofit Industries Ltd. [2015 (319) ELT 221 (SC)] and in CCE, Mumbai-III Vs. Emco Ltd. [2015 (322) ELT 394 (SC)] and the principles laid down in Roofit Industries Ltd. (supra) were as under: - 13 . In the present case, we find that most of the orders placed with the respondent assessee were by the various Government authorities. One such order, i.e., order dated 24-6-1996 placed by Kerala Water Authority is on record. On going through the terms and conditions of the said order, it becomes clear that the goods wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e availed for transport of goods from the place of removal to buyers premises during the period, January 2010 to June 2010. Taking note of the amended definition of input service which became effective from 01.03.2008, replacing the word from by the word up to with the expression place of removal , it was observed as:- 7 . It may be relevant to point out here that the original definition of input service contained in Rule 2(l) of the Rules, 2004 used the expression from the place of removal . As per the said definition, service used by the manufacturer of clearance of final products from the place of removal to the warehouse or customer s place etc., was exigible for Cenvat Credit. This stands finally decided in Civil Appeal No. 11710 of 2016 (Commissioner of Central Excise Belgaum v. M/s. Vasavadatta Cements Ltd.) vide judgment dated January 17, 2018. However, vide amendment carried out in the aforesaid Rules in the year 2008, which became effective from March 1, 2008, the word from is replaced by the word upto . Thus, it is only upto the place of removal that service is treated as input service. This amendment has changed the entire scenario. The benefit which was admissible even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed, judgment of the High Court is set aside and the Order-in-Original dated August 22, 2011 of the Assessing Officer is restored. Thus, the law has been settled by the said decision of the Apex Court as to the applicability of the Circular and the interpretation of the amended definition of input service thereby holding that the assessee was not entitle to the credit for transport of goods from Place of removal to customer s premises. 11. We now consider the facts of the present case. It is not disputed that the appellant had collected the amount towards freight from the customers but have not included the same in the transaction value and hence, no central excise duty was paid on the said amount. The ownership of the goods was to be transferred at the buyers premises, where the sale actually took place and, therefore, the place of removal for the purpose of valuation under Section 4 was the buyers premises. It is also noticed that along with the ownership of the goods, risk in transit, remained with the appellant till goods were accepted by the buyer on delivery, until such time the delivery was made, the appellant remained the owner of the goods. These facts clearly show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was stated in para 2 as under: 2 . In order to bring clarity on the issue, it has been decided that Circular No.988/12/2/2014-CX dated 20.10.2014 shall stand rescinded from the date of issue of this circular. Further, clause (c) of para 8.1 and para 8.2 of the circular no.97/8/2007-CX dated 23.08.2007 are also omitted from the date of issue of this circular. The above paragraph rescinding the earlier Circular have been very cautiously drafted, whereby the Circular of 2014 was rescinded in toto, whereas in respect of Circular dated 23.08.2007 only clause (c) of para 8.1 and para 8.2 was omitted. 13. Now coming to the other contents of the latest Circular of 2018, the relevant paragraphs 3 and 4 are quoted herein below: 3. General Principle: As regards determination of place of removal , in general the principle laid by Hon ble Supreme Court in the case of CCE vs. Ispat Industries Ltd 2015(324) ELT 670 (SC) may be applied. Apex Court, in this case has upheld the principle laid down in M/s Escorts JCB (Supra) to the extent that place of removal is required to be determined with reference to point of sale with the condition that place of removal (premises) is to be referred with refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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