2004 (2) TMI 560 - AT - Central Excise

Tribunal waives pre-deposit, rules on excise duty vs. transportation costs. Clarity on assessable value exclusion.

The tribunal allowed the appeal after waiving the pre-deposit amount, following the interpretation that duty of excise is on the manufacturer, not on ... Inclusion of freight in assessable value - excess freight not includible in assessable value - excise duty is a tax on manufacturer and not on dealer's freight profitInclusion of freight in assessable value - excess freight not includible in assessable value - excise duty is a tax on manufacturer and not on dealer's freight profit - Whether excess freight collected by the assessee is required to be included in the assessable value of goods manufactured for levy of excise duty - HELD THAT: - The Tribunal found the question conclusively resolved by the Apex Court in Baroda Electric Meters Ltd. which, relying on Indian Oxygen Ltd. , held that excise duty is a tax on the manufacturer and not upon profits earned by a dealer on transportation. The Tribunal rejected the attempt to distinguish those precedents on the ground of equalised freight and noted that subsequent tribunal decisions, including Anjaleem Enterprises Pvt. Ltd. , have applied the same ratio even where freight was not equalised. Applying that settled principle, the Tribunal held that excess freight collected by the appellants need not be included in the assessable value of goods manufactured and cleared by them. [Paras 2, 3]Impugned order set aside; appeal allowed and confirmation of duty by including excess freight in assessable value quashed.Final Conclusion: The appeal was allowed: the demand by including excess freight in assessable value was set aside, following the Apex Court's ratio that excise duty is on the manufacturer and excess freight representing dealer profit is not includible. Issues:1. Application for waiver of pre-deposit of duty and penalty.2. Inclusion of excess freight in the assessable value of goods.3. Interpretation of Apex Court's decision in Baroda Electric Meters Ltd. v. CCE.4. Tribunal's decision in Anjaleem Enterprises Pvt. Ltd. v. CCE regarding excess freight.Analysis:1. The judgment dealt with an application for waiver of pre-deposit of duty and penalty. The duty confirmed included excess freight collected by the appellants in the assessable value of goods manufactured and cleared by them during 1997-98. The tribunal, after hearing both sides, decided to proceed with hearing the appeal itself after waiving the pre-deposit amount, with the consent of both parties.2. The main issue revolved around the inclusion of excess freight in the assessable value of goods. The tribunal referred to the Apex Court's decision in Baroda Electric Meters Ltd. v. CCE, where it was held that duty of excise is a tax on the manufacturer and not on the profits incurred by a dealer on transportation. The tribunal noted that in other cases, such as Anjaleem Enterprises Pvt. Ltd. v. CCE, where it was not a case of equalized freight, the tribunal applied the ratio of the Supreme Court's decision and held that excess freight should not be included in the assessable value of goods manufactured.3. By following the ratio of the above orders and the interpretation of the Apex Court's decision in Baroda Electric Meters Ltd. v. CCE, the tribunal set aside the impugned order and allowed the appeal. This decision was based on the understanding that duty of excise is levied on the manufacturer and not on the transportation costs incurred by the dealer.In conclusion, the judgment provided a comprehensive analysis of the issues related to the inclusion of excess freight in the assessable value of goods and the interpretation of relevant legal precedents, ultimately leading to the allowance of the appeal in favor of the assessees.