2014 (1) TMI 632 - AT - Central Excise

Tribunal grants waiver for duties, interprets assessable value, and stays recovery during Appeals.

The Tribunal granted a waiver of pre-deposit for two applications concerning duties, interpreting the assessable value of goods excluding freight and ... Erroneous refund claim granted - Freight and insurance charges to be added in the assessable value or not – Waiver of Pre-deposit – Held that:- As per the terms of the contract, the goods are to be delivered at customer’s place, and freight and insurance charges are part of the transaction value – Following CCE, Chandigarh vs. Punjab Tractors Ltd. [2010 (7) TMI 392 - CESTAT, NEW DELHI] - Prima facie, the Applicant has strong case in their favour – Pre-deposits waived till the disposal – Stay granted. Issues:1. Waiver of pre-deposit of duties for two applications.2. Interpretation of assessable value of goods in relation to freight and insurance charges.3. Applicability of Tribunal decisions on the place of removal in excise duty cases.4. Consideration of contract terms for determining assessable value.5. Granting of stay on recovery of disputed amount during pendency of Appeals.Analysis:Issue 1: Waiver of pre-deposit of dutiesThe applicants sought waiver of pre-deposit of duties amounting to Rs.5,58,693/- and Rs.17,90,959/- for two separate applications. The Counsel for the applicants argued that since both appeals were against a common impugned order, both stay petitions should be considered together.Issue 2: Interpretation of assessable valueThe dispute arose from the refund claims filed by the Applicant under Notification No.32/99-CE, where the Adjudicating Authority challenged the inclusion of freight and insurance charges in the assessable value of goods. The Commissioner (Appeals) ruled in favor of the Revenue, relying on a Tribunal decision that the place of removal is the factory gate, and hence, such charges should not be added to the assessable value.Issue 3: Applicability of Tribunal decisionsThe Applicant contended that a different Tribunal decision in the case of CCE, Chandigarh vs. Punjab Tractors Ltd. supported their claim. This decision considered the contract terms for sale of goods, emphasizing that if goods are to be supplied at the customer's place, then freight and insurance charges should be included in the assessable value. The Applicant argued that the contract in their case specified door-delivery at the customer's place, aligning with the Punjab Tractors decision.Issue 4: Consideration of contract termsThe Tribunal analyzed the terms of the contract in the present case and found that the goods were to be delivered at the customer's place, with freight and insurance charges forming part of the transaction value. Consequently, the Tribunal deemed the Punjab Tractors decision applicable to the current situation, indicating a strong case in favor of the Applicant for a total waiver of the disputed amount.Issue 5: Granting of stay on recoveryConsidering the contractual terms and the applicability of the Punjab Tractors decision, the Tribunal waived the pre-deposit of the entire disputed amount and stayed the recovery during the pendency of the Appeals. Both stay petitions were allowed based on the merits of the Applicant's contentions.This detailed analysis of the judgment highlights the key legal issues, interpretations of relevant laws, and the Tribunal's decision based on the arguments presented by the parties involved.