Tribunal Excludes Handling Charges from Jute Cess Calculation

M/s. Jagatdal Jute & Industries Ltd. Versus Commr. of CGST & CX- Kolkata North

M/s. Jagatdal Jute & Industries Ltd. Versus Commr. of CGST & CX- Kolkata North - TMI Issues:
- Under-valuation of goods due to non-inclusion of handling charges in transaction value
- Applicability of jute cess on goods supplied to government agencies through DGS&D
- Interpretation of pricing terms in requisition orders
- Legal precedent on inclusion of handling charges in transaction value for jute cess calculation

Issue 1: Under-valuation of goods due to non-inclusion of handling charges in transaction value
The case involved a dispute where the appellant, engaged in manufacturing jute products, was alleged to have under-valued goods by not including handling charges in the transaction value, leading to less payment of jute cess. The Adjudicating Authority confirmed a demand along with interest and imposed a penalty. On appeal, the Ld. Commissioner upheld the decision, prompting the appellant to approach the Tribunal.

Issue 2: Applicability of jute cess on goods supplied to government agencies through DGS&D
The appellant supplied jute bags to government agencies through DGS&D, with pricing stipulated in requisition orders not including second stage handling charges. The dispute arose regarding whether these handling charges should be considered in the transaction value for calculating jute cess on goods cleared through DGS&D.

Issue 3: Interpretation of pricing terms in requisition orders
The appellant argued that the requisition orders from DGS&D did not include second stage handling charges in pricing, and sales were ex-factory with Central Sales Tax charged at the factory gate. The appellant relied on legal precedent and the decision of the Ld. Commissioner in a similar case to support their position.

Issue 4: Legal precedent on inclusion of handling charges in transaction value for jute cess calculation
The Tribunal referred to established judicial precedents, including judgments of the Supreme Court in cases like Ispat Industries Ltd. and Brimco Plastic Machinery (P) Ltd. The Tribunal held that handling charges like 2nd stage handling charges should not be included in the transaction value for calculating jute cess on goods cleared through DGS&D.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal filed by the appellant with consequential benefits. The decision was based on the interpretation of legal precedents and the specific circumstances of the case, emphasizing the exclusion of handling charges from the transaction value for jute cess calculation.