2014 (4) TMI 500 - AT - Central Excise

Tribunal rules in favor of respondents in dispute over insurance charges, citing change in requirements

CCE, Bhopal Versus MP. United Polyproline Ltd.

The Tribunal upheld the Commissioner's order in a dispute over the addition of 1% insurance charges in the assessable value for taxation purposes. The ... Valuation of goods - addition of 1% charges recovered by the respondents from their clients and shown separately in the bills as insurance charges - Held that:- Admittedly, prior to the 01.10.96, all the invoices reflecting upon collection of 1% insurance charges was being placed before the Revenue. If the law changed and there was no requirement of annexing the invoices with RG-1 returns, it cannot be said that the appellant contravened any provisions of law with an intent to evade payment of duty so as to invoke the extended period - Decided against Revenue. Issues:Dispute over addition of 1% insurance charges in assessable value for taxation purposes. Applicability of new valuation rules. Dispute regarding submission of invoices to Revenue post a specific date.Analysis:The judgment pertains to an appeal filed by the Revenue against an order passed by the Commissioner (Appeals) concerning the addition of 1% charges shown as insurance charges in bills by the respondents. The Commissioner had ruled that under new valuation rules, expenses on freight and insurance should be included in the assessable value. However, the Commissioner granted relief to the respondents on the grounds of proper disclosures being made to the department, thus disallowing the Revenue's claim for an extended period for tax demand.The Revenue, in their appeal, did not challenge the Commissioner's finding but contended that post a certain date, invoices submission with RG-1 returns was no longer mandatory. They argued that since invoices were not produced to the Revenue after this date, the demand should be confirmed from that specific date. The Tribunal noted that prior to the mentioned date, all invoices reflecting the 1% insurance charges were presented to the Revenue. The Tribunal emphasized that if the law changed and there was no longer a requirement to attach invoices with returns, it could not be alleged that the appellant violated any laws with an intent to evade duty, thereby rejecting the Revenue's appeal.In conclusion, the Tribunal upheld the Commissioner's order, stating that as there was no merit in the Revenue's appeal, it was rejected. The judgment was delivered by Ms. Archana Wadhwa, and it was dictated and pronounced in an open court setting.