2019 (1) TMI 1098 - AT - Central Excise

Tribunal Allows Appeals on Central Excise Duty Exclusion of Transportation Costs

Tapi Prestressed Products Ltd, MK Kotecha Prestressed Products Pvt Ltd Versus Commissioner of Central Excise & Customs Nashik

Tapi Prestressed Products Ltd, MK Kotecha Prestressed Products Pvt Ltd Versus Commissioner of Central Excise & Customs Nashik - TMI Issues Involved:Challenge against differential duty, interest, and penalty under Central Excise Act, 1944 for transportation costs excluded from assessable value at the time of removal from the factory.Analysis:1. The appeals by two manufacturers against the differential duty of Rs. 7,13,398, along with interest and penalty imposed under the Central Excise Act, 1944, were heard. The duty was held recoverable for the period from March 2003 to February 2007 on transportation costs excluded from the assessable value at the time of removal from the factory.2. The impugned orders relied on the provisions of section 4 of the Central Excise Act, 1944, post its amendment from 14th May 2003, which included the place of sale in the definition of 'place of removal'. The Sale of Goods Act, 1930 was also referred to in determining the location of sale.3. The appellant's Chartered Accountant referred to a Supreme Court judgment which analyzed the amendments to section 4 of the Central Excise Act, 1944, and concluded that post 14-5-2003, the cost of transportation from the place of removal to the place of delivery is to be excluded, except when the factory is not the place of removal. The buyer's premises cannot be considered the place of removal for the purpose of Section 4.4. The decision of the Tribunal in a related case was also considered, emphasizing the exclusion of transportation costs beyond the factory premises in determining duty liability.5. The Authorized Representative argued that all costs up to the site of assembly should be included in determining duty liability since the place of removal was deemed to be the buyer's premises.6. However, the Tribunal held that the transportation costs should not be included in the assessable value of the goods based on the Supreme Court's decision. It was established that the manufacturer did not retain ownership of the goods at the site of assembly, and the sale did not occur at the buyer's premises as contended by the Revenue.7. Consequently, following the Supreme Court's decision, the Tribunal set aside the impugned order, allowing the appeals of the manufacturers against the differential duty, interest, and penalty imposed under the Central Excise Act, 1944.This detailed analysis of the judgment highlights the key legal arguments, interpretations of relevant statutes, and the final decision rendered by the Tribunal in favor of the appellants.