Assessable value and limitation in excise: transport-arrangement charges excluded, and extended period barred where invoices were disclosed.
Charges collected for arranging transport of sulphuric acid were held not includible in excise assessable value because they were levied only in a small number of cases, were linked to special handling and training for a hazardous commodity, and did not form part of the price of removal. A demand based on clearances at a lower value was also found time-barred because the relevant invoices and valuation particulars had been disclosed to the department, so the extended limitation period could not be invoked. The article states that the demand and consequential penalty were set aside.
Issues: (i) Whether the amount collected at Rs. 2 per MT towards arranging transport of sulphuric acid was includible in the assessable value; (ii) whether the demand raised in respect of clearances at a lower value was barred by limitation.
Issue (i): Whether the amount collected at Rs. 2 per MT towards arranging transport of sulphuric acid was includible in the assessable value.
Analysis: The amount was collected only in a small percentage of cases where the assessee arranged transport for customers. The explanation that the charge related to special handling and training for transporting a hazardous commodity was accepted. Even if treated as transport-related consideration, it was not part of the assessable value for excise purposes.
Conclusion: The amount was not includible in the assessable value and the demand on this count was unsustainable.
Issue (ii): Whether the demand raised in respect of clearances at a lower value was barred by limitation.
Analysis: The demand covered a period already beyond the normal limitation and the invoices showing the lower clearance value had been filed with the Revenue. In the absence of non-disclosure, the extended period could not be invoked.
Conclusion: The demand was barred by limitation and was liable to be set aside.
Final Conclusion: The demand and the consequential penalty were set aside, resulting in relief to the assessee.
Ratio Decidendi: Charges collected for transport arrangements are not includible in assessable value when they do not form part of the price of removal, and the extended limitation period cannot be invoked where the relevant invoices and valuation particulars were disclosed to the department.
TaxTMI 
AI Drafter ✕
TaxTMI 
