2014 (12) TMI 839 - AT - Central Excise

Tribunal rules in favor of appellant in duty payment dispute for plastic laminate manufacturing

M/s First Flexipack Corporation Versus CCE & ST, Jammu & Kashmir

The Tribunal ruled in favor of the appellant, an assessee in Jammu & Kashmir, in a case involving the interpretation of an area-based exemption ... Denial of refund claim - Deduction of freight and insurance etc from assessable value of goods - By paying duty on the higher assessable value, they have claimed refund of the excess amount of duty - Held that:- as much as the sale was on FOR destination basis and the invoices mentioned only one consolidated FOR price, the said price has to be taken as the proper assessable value and the duty paid by the assessee has to be taken as the correct quantum of duty - invoices are on FOR destination basis and there is only one composite price charged by the appellants from its customers. As such, by adopting the ratio of above referred decision, we are of the view that the impugned orders are required to be set aside - Following decision of M/s Ultimate Flexipack Ltd. vide [2014 (4) TMI 654 - CESTAT NEW DELHI] - Decided in favour of assesse. Issues:1. Interpretation of area-based exemption Notification No. 56/2002-CE dated 14/11/02 for an assessee in Jammu & Kashmir.2. Dispute regarding duty payment on freight, forwarding, and insurance elements.3. Assessment of assessable value for duty payment.Analysis:1. The judgment deals with the interpretation of an area-based exemption Notification applicable to an assessee in Jammu & Kashmir engaged in the manufacture of plastic laminates. The appellant availed the exemption requiring duty liability discharge from accumulated Cenvat credit and payment of the balance from the PLA, with duty paid from PLA refunded as per the notification.2. The dispute arose from the appellant paying excess duty on the final product, including duty on freight, forwarding, and insurance elements. The Revenue contended that these elements were admissible deductions from the assessable value, resulting in the appellant paying duty on a higher assessable value. Consequently, proceedings were initiated, leading to demands against the appellant by denying the excess refund.3. Referring to a previous case involving the appellant's sister concern, the Tribunal held that in a similar scenario of sale on FOR destination basis with invoices showing a consolidated FOR price, that price should be considered the proper assessable value for duty payment. Applying this precedent, the Tribunal in the present case found that the invoices were on FOR destination basis with a single composite price, leading to the conclusion that the impugned orders should be set aside. As a result, all appeals were allowed with consequential relief to the appellant.