2018 (4) TMI 1958 - AT - Central Excise

Tribunal Upholds Exclusion of 'Other Charges' from Transaction Value, Dismissing Department's Appeal Based on Settled Precedent

The Tribunal dismissed the Department's appeal against the Order-in-Appeal by the Commissioner (Appeals) Central Excise, Rajkot, which had dropped the ... Levy of Excise Duty - ''other charges'' - assessee-Respondents had collected the Sales Tax amount and shown the same in the books of account as ''other charges'' - HELD THAT:- Any amount recovered attributable to “other expenses” i.e. Sales Tax is not includible in the transaction value as it can only be considered as profit on an activity. Similar view has come up for consideration before the Tribunal in the assessee Respondents’ own case INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD [2013 (9) TMI 310 - CESTAT AHMEDABAD], where the majority decision was in favour of the assessee-Respondents. There are no reason to interfere with the impugned order and the same is hereby upheld - the appeal filed by the Department is dismissed. Issues:Department's appeal against dropping of duty on 'other charges' by Commissioner (Appeals) Central Excise, Rajkot.Analysis:The appeal was filed by the Department against the Order-in-Appeal passed by the Commissioner (Appeals) Central Excise, Rajkot, where the assessee Respondents had collected Sales Tax amount and shown it as 'other charges' in their books. The Department demanded duty on these charges, but the Commissioner (Appeals) dropped the same. The Tribunal considered that any amount recovered attributable to 'other expenses' like Sales Tax should not be included in the transaction value as it is considered profit on an activity. The Tribunal referred to a similar case involving the assessee Respondents where the majority decision was in their favor. Additionally, both parties acknowledged that the issue was covered by a previous decision in the case of CCE, Mangalore vs Shree Krishna Pipe Industries. Consequently, the Tribunal upheld the impugned order as there was no reason to interfere based on the settled legal position.The Tribunal heard arguments from both sides and reviewed the material available on record. It was noted that the Sales Tax amount collected by the assessee-Respondents and shown as 'other charges' in their books should not be considered for duty calculation as it falls under profit on an activity. The Tribunal referenced a previous case involving the assessee Respondents where a majority decision favored them. Furthermore, both parties agreed that the issue was covered by a prior decision in a different case. Given the established legal position, the Tribunal dismissed the Department's appeal and disposed of the cross objection accordingly.