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of <h1>Tribunal affirms decision on duty demand location, citing manufacturer's point of sale as key.</h1> <h3>CGST, Alwar Versus Purma Plast Pvt. Ltd.</h3> CGST, Alwar Versus Purma Plast Pvt. Ltd. - TMI Issues Involved:1. Whether the confirmation of the demand of duty with interest on freight and insurance by the adjudicating authority was justified or not.Issue-wise Analysis:1. Confirmation of the Demand of Duty with Interest on Freight and Insurance:The appeal by the Revenue challenges the order dated 30 May 2018 of the Commissioner (Appeals), which dealt with the confirmation of the demand of duty with interest on freight and insurance by the adjudicating authority.The Respondent was engaged in the manufacture of Polyethylene Pipes and was selling the final product to BSNL on a contract basis. The Respondent discharged duty liability only on the value of goods at the factory gate without including expenses incurred from the factory gate to the destination, resulting in short payment of Central Excise duty. The Adjudicating Authority confirmed the short-paid Central Excise duty, but the Commissioner (Appeals) set aside this confirmation, provided the Respondent reversed/deposited the Cenvat Credit of Service Tax paid on outward GTA service up to the place of delivery with interest.The Commissioner (Appeals) relied on the Supreme Court's decision in CCE, Nagpur vs Ispat Industries Ltd., which interpreted Section 4 of the Central Excise & Salt Act, 1944 and Rule 5 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The Supreme Court clarified that the 'place of removal' refers to the place from where the manufacturer sells the goods, not the place of delivery, which could be the buyer's premises.The Commissioner (Appeals) observed that although the contract was on a 'free on receipt' basis, the freight or rate of freight was separately mentioned in the contracts, and invoices were issued when the goods left the factory premises. The amount of freight, sales tax, etc., were charged separately, and the 'time of removal' was noted as when the goods left the factory premises. Therefore, the place of removal was the factory gate, and the place of delivery was the buyer's premises.The Revenue relied on the Supreme Court's decision in CC & CE, Aurangabad vs Roofit Industries Ltd., where it was held that the sale of goods took place at the buyer's premises based on the terms of the contract, which included transportation, transit risk, and unloading charges. However, the terms and conditions in the present case were different and more akin to those in Ispat Industries Ltd., where the place of removal was the factory gate.The Tribunal in Shardha Ceramics Pvt. Ltd. vs CCE, Jodhpur, and CCE, Jaipur-I vs Tiirupati Plastomatics Pvt. Ltd. & Ors. also followed the Supreme Court's decision in Ispat Industries Ltd., observing that the cost of transportation from the place of removal to the place of delivery is excluded from the computation of excise duty if charged to the buyers and shown separately in the invoices.In conclusion, the Tribunal found no infirmity in the order passed by the Commissioner (Appeals) and dismissed the appeal filed by the Revenue. The demand of duty with interest on freight and insurance was not justified as the place of removal was determined to be the factory gate, not the buyer's premises.
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