2015 (10) TMI 1354 - AT - Central Excise

Appellate Tribunal Upholds Exclusion of Post-Clearance Charges from Assessable Value

The Appellate Tribunal CESTAT Ahmedabad rejected the Revenue's appeal against the Commissioner (Appeals) order, which set aside the adjudication order and ... Duty demand - Valuation - Inclusion of expenses incurred after clearance of the goods - Held that:- Adjudicating Authority confirmed the demand of duty on the excess collection of amount of State Surcharges, Retail Pump Outlet (RPO) charges, RPO Surcharges, Railway Siding/Shunting Charges, Airfield etc. The Adjudicating Authority confirmed the demand of duty alongwith interest and imposed penalty for the period March, 1994 to June 1996 on the ground that the appellants cleared the goods from Vadodara Refineries to Sabarmati Terminal and the expenses incurred after clearance of the goods from Vadodara Refinery would be included in the assessable value. Commissioner (Appeals) set-aside the Adjudication order. - there was a factory gate (refinery) sale of the appellant during the relevant period. The appellant paid duty on the price at factory gate. - issue is no more res-integra, in view of the decision of the Tribunal in the case of Bharat Petroleum Corporation Ltd. vs. Commissioner of Central Excise, Cochin [1998 (12) TMI 223 - CEGAT, MADRAS], which is upheld by the Honble Supreme Court has reported in [1998 (12) TMI 580 - SUPREME COURT OF INDIA]. - No reason to interfere the order of the Commissioner (Appeals). - Decided against Revenue. Issues involved:- Appeal against Commissioner (Appeals) order setting aside adjudication order and allowing respondent's appeal.- Demand of duty on excess collection of various charges post-clearance from factory gate.- Interpretation of assessable value including post-clearance expenses.- Consideration of pipeline charges as post-clearance expenditure.- Reference to previous Tribunal decision in Bharat Petroleum Corporation Ltd. case.Analysis:The appeal before the Appellate Tribunal CESTAT Ahmedabad was filed by the Revenue against the order of the Commissioner (Appeals) where the adjudication order was set aside, and the respondent's appeal was allowed. The Adjudicating Authority had confirmed the demand of duty on excess collection of State Surcharges, Retail Pump Outlet charges, Railway Siding/Shunting Charges, and other expenses incurred post-clearance from the factory gate. The Commissioner (Appeals) reversed this decision, emphasizing that charges incurred after clearance from the factory gate should not be included in the assessable value. The Commissioner noted that pipeline charges should be considered as post-clearance expenditure and not part of the assessable value based on the normal place of removal being the factory gate.The Commissioner's order referenced the Tribunal's decision in the Bharat Petroleum Corporation Ltd. case, which was upheld by the Supreme Court. This previous decision established the principle that certain charges, like pipeline charges, should not be included in the assessable value for demanding duty if they are demonstrated to be transportation charges. The Tribunal, in the present case, found no reason to interfere with the Commissioner (Appeals) order based on the interpretation of assessable value and post-clearance expenses. Therefore, the appeal filed by the Revenue was rejected, upholding the decision in favor of the respondent.