Tribunal excludes transportation charges from excise duty calculation, ruling in favor of appellant.

LAXMI UDYOG Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR

LAXMI UDYOG Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR - 2013 (294) E.L.T. 437 (Tri. - Del.) Issues:
- Whether the forwarding charges collected by the appellant form part of the assessable value for excise duty calculation.
- Applicability of Rule 5 of the Central Excise Valuation Rules.
- Interpretation of the amendments to Rule 5 post-1-3-2003 regarding transportation costs.
- Admissibility of evidence regarding transportation charges collected by the appellant.

Analysis:

Issue 1:
The Revenue contended that the forwarding charges collected by the appellant should be considered as part of the assessable value for excise duty calculation. The appellant argued that these charges were for transportation from the factory to the transporter's godown and should not be included in the assessable value. The Commissioner (Appeals) provided some relief, but the appellants were still aggrieved and filed further appeals.

Issue 2:
The Revenue relied on Rule 5 of the Central Excise Valuation Rules, which stipulated that if the cost of transportation is charged to the buyer in addition to the price for the goods and shown separately in the invoice, it should be excluded from the assessable value. The Revenue argued that since the appellants did not indicate the actual freight separately, these amounts should be included in the assessable value.

Issue 3:
The Tribunal analyzed the amended Rule 5 post-1-3-2003, which clarified that the cost of transportation from the place of removal to the place of delivery should be excluded from the value of excisable goods. The rule also allowed for the deduction of transportation costs calculated based on accepted principles of costing. The Tribunal noted that for the relevant period falling after 1-3-2003, such transportation costs did not form part of the value.

Issue 4:
The appellant submitted photocopies of bills of carriers to support their argument that the charges collected were for transportation from the factory to the transporter's godown. However, the submission was rejected based on the grounds that the invoice indicated delivery at the factory gate. The Tribunal found no merit in the Revenue's argument that the charges should form part of the value and sided with the appellant, allowing the appeal with consequential benefits.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the transportation charges collected were for the transportation from the factory to the transporter's godown and should not be considered part of the assessable value for excise duty calculation. The Tribunal also highlighted the amendments to Rule 5 post-1-3-2003, which clarified the treatment of transportation costs in the valuation of excisable goods.