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TMI Blog2024 (9) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... le. Appeal allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Sudhanshu Bissa, Advocate for the Appellant Shri Shri Sanjay Kumar Superintendent (AR) for the Respondent ORDER The brief facts of the case are that M/s. Lubi Industries LLP having central excise registration are engaged in the manufacture of Power Driven Pumps (PD Pumps) and parts thereof falling under chapter 84 of Central Excise Tariff Act,1985 (5 of 1986). The appellant have recovered the amount towards handling charges as well as inspection charges in their invoice from their buyers but the same was not included in the assessable value of the excisable goods cleared on payment of central excise duty. The case of the department is that pre delivery inspection charges are mentioned in the provision of Section 4 of the Central Excise Act, 1944 and it was to be included in the assessable value as per board circular NO. 643/24/2002-CE dated 01.07.2002. Accordingly, the show cause notices were issued to the appellant proposing demand of Central Excise Duty. The Adjudicating Authority vide Orders-In-Original dated 13.10.2017 confirmed the demand of all the show cause notices along with in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wise. We find that this very issue in the appellant s sister concern i.e. M/s. Mira Industries vs. CC Ahmedabad 2023 (4) TMI 655 (Ahd.) this Tribunal has taken a view that the handling charges recovered from the customers is not includible in the assessable value. The said judgment is reproduced below:- 04. We have carefully considered the submission made by both sides and perused the records. The issue required to be decided in this matter is that whether the amount shown separately as freight and handling charges in the invoices can be included in the assessable value u/s 4 of the Central Excise Act, 1944 or not. We find that Revenue s case has no merits as during the disputed period duty liability has been discharged by the appellant on the basis of transaction value. We have seen the specimen invoice copy produced by the learned Counsel and note that duty paying documents were indicating separately the value for the freight and handling charges. 4.1 It is the case of the department that price of the goods so recovered should include elements of freight and handling charges which cannot be considered as transportation/handling cost but it is additional consideration. In this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal facts of the case, it appears that the appellant is a manufacturer of leaf spring which attracts the Central Excise duty under the heading 85 of CETA, 1985. The appellant clears the goods from their factory and through their depots situated in different parts of the country. The appellant has shown the handling charges collected @ 1% of the value as a part of the transaction cost by raising separate bills. So, the Department has demanded the duty of Rs. 64,660/- with equal penalty under Section 11AC of the Central Excise Act, 1944 as handling charges. 5. It may be mentioned that the cost of transportation from the place of removal up to the place of delivery of such goods is not includible in the assessable value under Section 4 of the Central Excise Act, 1944 and not chargeable to Central Excise duty under Section 3 of the Act. In the instant case, the appellant has claimed the handling charges of 1% of the value as part of the transportation cost. Therefore, it is not includible in the assessable value. 6. In view of the above, we set aside the impugned order and allow the appeal. 4.3 In the above judgments it is held that amount charged as freight handling charges and separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce on record to show by the department that said charges are nothing but arrangement for reducing the assessable value of goods. In the absence of any such evidence it has to be held that the entire element of freight and handling charges shown separately in the invoices is nothing else but freight and handling charges. It is now a settled law as per the relied upon judgments cited supra by the Learned Counsel that any amount collected separately as freight in the invoices cannot be included in the assessable. CESTAT, West Zonal Bench, Mumbai in the case of CCE, Nagpur v. Ram Krishna Electrical Pvt. Ltd.2011 (272) E.L.T. 149 (Tribunal) (supra) has also held as follows : - 5.1 The Hon ble Apex Court in the case of Commissioner of Central Excise v. Accurate Meters Ltd. 2009 (235) E.L.T. 581 (S.C.) considered a similar situation wherein the goods were supplied by the assessee to the State Electricity Boards and two separate contracts were entered into, one for sale of meters and another for transportation and transit insurance thereof. As per the terms of the contract, the assessee was bound to transport the goods from the factory-gate to the place of State Electricity Boards at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also not includable in the assessable value of the excisable goods, consequently, duty demand on the said elements is not sustainable. 05. Accordingly, the impugned order is set aside. The appeal filed by the appellant is allowed. 4.1 From the above it can be seen that the decision is given considering the various Supreme Court and CESTAT judgments. The facts of the above case and the case in hand are absolutely identical. Therefore, following the judgment of Mira Industries (Supra), in the present cases the handling charges is not includible in the assessable value of the excisable goods. Accordingly, the demand in this respect is not sustainable. 5. Hence, the impugned orders are modified to the above extent. Appeals are allowed in the above terms. 4.1 From the above it can be seen that the decision is given considering the various Supreme Court and CESTAT judgments. The facts of the above case and the case in hand are absolutely identical. Therefore, following the judgment of Mira Industries (Supra), in the present cases the handling charges is not includible in the assessable value of the excisable goods. Accordingly, the demand in this respect is not sustainable. 5. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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