Delhi HC: Woman's Right to a Shared Household Does Not Allow Indefinite Occupation of In-Laws' Home  ||  Delhi HC: Director Disputes in a Company Do Not Qualify as Genuine Hardship to Delay ITR Filing  ||  Delhi HC: ECI Cannot Resolve Internal Disputes of Unrecognised Parties; Civil Court Must Decide  ||  Bombay High Court: Senior Citizens Act Cannot be Misused to Summarily Evict a Son  ||  Chhattisgarh HC: Service Tax Refund Can't Be Denied on Limitation When Payment Was Made During Probe  ||  Supreme Court: If Tribunal Ends Case For Unpaid Fees, Parties Must Seek Recall Before Using S.14(2)  ||  SC: Article 226 Writs Jurisdiction Cannot be Used to Challenge Economic or Fiscal Reforms  ||  Supreme Court: Hostile Witness Testimony Can't Be Discarded; Consistent Parts Remain Valid  ||  Supreme Court: GPF Nomination in Favour of a Parent Becomes Invalid Once the Employee Marries  ||  Supreme Court: Candidate Not Disqualified if Core Subject Studied Without Exact Degree Title    

Panama Petrochem Ltd vs. Commissioner of C.E. & S.T. - (Customs, Excise and Service Tax Appellate Tribunal) (05 Apr 2024)

Freight/insurance amount is not includable in assessable value of goods for charging excise duty

MANU/CS/0140/2024

Excise

In present matter, the Appellant entered in contract with IOCL, HPCL. As per the contract the appellant is responsible for delivery of goods to the destination of different location as mentioned in contract. The case of the department is that the freight/insurance charges collected by the appellant in addition to the price of the goods are includible in the transaction value and excise duty is chargeable on such freight/ insurance charges. Accordingly, two show cause notices were issued to the appellant and subsequently demand was confirmed by the Original Adjudicating Authority vide Order-in-Original. Being aggrieved by the impugned Order, appellant is before this Tribunal.

The issue involved in the present case is that whether the freight/insurance charged separately in the sale invoices of excisable goods is includible in the assessable value of such excisable goods.

Freight/insurance have been charged separately and received separately. We also take notice that the buyers of the goods Indian Oil Corporation Ltd. and Hindustan Petroleum Corp. Ltd. have issued purchase order specifying the price for the goods separately and also specifying the transportation cost for the supply of goods. Accordingly, appellant have supplied the goods and raised invoices for the price of goods and the transportation. Thus, it amounts to showing the cost of transport separately in the invoices.

The place of removal is factory gate, however the goods were delivered at customer place. Therefore, goods were sold for delivery not at the place of removal (i.e. factory gate) but at other place i.e. customer door step. Present Tribunal have perused copies of the purchase contract placed by the Indian Oil Corporation Ltd and Hindustan Petroleum Corp. Ltd. and invoices issued by the Appellant. From the invoices, it is seen that the freight/insurance shown in the invoices is in addition to basic price of the goods.

It is clear from the terms of the purchase contract that basic price and other components have to be indicated separately. Therefore, there is no dispute that basic price and the freight/insurance components are clearly indicated separately in the invoices and therefore criterion i.e. cost of transportation should be in addition to the basic price of the goods stand fulfilled.

No valid reason for disallowing the deduction for the freight/insurance paid inasmuch as the sales are FOR destination. A coordinate Bench of CESTAT in the case of Sterlite Optical Technologies Ltd. v. CCE & C, Aurangabad has taken a view in identical facts that freight/insurance will be allowable as a deduction from the composite price. Thus, the contention of the Department to include the freight/insurance amount in the assessable value does not meet the test of law and hence not legally sustainable. Hence, there is no merit in order passed by the appellate authority. Freight/insurance amount is not includable in the assessable value of the goods for charging excise duty. Accordingly, the impugned order is set aside. Appeal allowed.

Tags : DEMAND   CONFIRMATION   LEGALITY  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved