Tribunal Rules Excess Freight Not 'Additional Consideration'

Ambhe Ferro Metal Processors Pvt Ltd Versus Commissioner of Central Excise Thane – I

Ambhe Ferro Metal Processors Pvt Ltd Versus Commissioner of Central Excise Thane – I - TMI 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.