2019 (3) TMI 604 - AT - Central Excise

Tribunal Rules Excess Freight Not 'Additional Consideration'

The Tribunal held that the excess freight collected from customers should not be considered as 'additional consideration' and set aside the impugned ... Liability of excise duty - excess freight recovered from customers - Held that:- The issue has been settled by the Tribunal in Mercedes Benz India Pvt Ltd v. Commissioner of Central Excise, Pune – I [2010 (8) TMI 790 - CESTAT MUMBAI] wherein it has been held that The excess freight collected from the dealers was only a profit on transportation and not an “additional consideration” within the meaning of this expression used in Rule 6, nor an “additional amount” within the meaning of the definition of “transaction value” under Section 4(3)(d) of the Act. Thus, the excess amount collected from customers, on one or both counts, is hit by the impropriety of inclusion of such amount as ‘additional consideration’ envisaged in the said Rules - appeal allowed - decided in favor of appellant. Issues:Duty liability on excess freight recovered from customers.Analysis:The appellants sought relief from the order confirming the demand of duty on excess freight recovered from customers and on the excess amount under various heads. The Tribunal referred to the case law of Mercedes Benz India Pvt Ltd, where it was held that the excess freight collected from dealers should not be included in the assessable value of goods. The Tribunal emphasized that the excess amount collected from customers was not an additional consideration related to the sale but rather a profit on transportation. The Tribunal rejected the argument of the Revenue that the excess amount represented additional consideration flowing from buyer to seller. The Tribunal held that the excess amount collected from customers should not be considered as 'additional consideration' and set aside the impugned order, allowing the appeals.The Learned Authorised Representative relied on a statement by Shri Ashish Gupta expressing willingness to pay the differential duty. However, in light of the Tribunal's decision in the Mercedes Benz case, it was found that the excess amount collected from customers was not in line with the rules regarding 'additional consideration.' Therefore, the impugned order was set aside, and the appeals were allowed.