Return fare of empty vehicles is excluded from excise assessable value; duty demand on that basis fails.

Cost of return fare for empty vehicles travelling back from the place of delivery to the buyer's premises was held not to form part of assessable value for excise duty. The department had sought inclusion by relying on an earlier circular that allowed exclusion only for transportation from the place of removal to the place of delivery, but the later circular of 19 May 2010 clarified that return fare need not be added. In light of that clarification and the Tribunal's earlier view on the same point, such charges were excluded from valuation and the duty demand was unsustainable.

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Issues: Whether the cost of return fare of empty vehicles from the place of delivery to the buyer's premises is includible in the assessable value for excise duty.

Analysis: The department had demanded duty by relying on the earlier circular dated 1 July 2002, on the footing that only transportation from the place of removal to the place of delivery could be excluded and that return fare charges were not deductible. The later circular dated 19 May 2010 clarified that the cost of return fare of the vehicle need not be added for determination of assessable value. That clarification was issued in light of the Tribunal's earlier decision on the same point, and the later position supported exclusion of such charges from assessable value.

Conclusion: The return fare of empty vehicles was not includible in the assessable value, and the duty demand was unsustainable.

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