Buyer's premises not "place of removal" for excise duty. Freight charges not included in assessable value. Appeal allowed.

The Tribunal held that the buyer's premises could not be considered the "place of removal" for excise duty purposes. Therefore, the inclusion of freight charges in the assessable value of goods was deemed incorrect. The appeal was allowed, and the demand for duty, interest, and penalty was set aside.

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Issues Involved:
1. Inclusion of freight charges in the assessable value of excisable goods.
2. Determination of the "place of removal" for the purpose of excise duty.
3. Application of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000.
4. Limitation and malafide intention to evade payment of duty.

Issue-wise Detailed Analysis:

1. Inclusion of Freight Charges in the Assessable Value:
The appellants, M/s Savita Oil Technologies Limited, were recovering transportation/freight charges from their buyers and indicating these separately on invoices. The Revenue contended that these freight charges should be included in the assessable value of the goods for excise duty purposes. The appellants argued, relying on the Supreme Court's decision in Ispat Industries Ltd. (2015 (324) ELT 670 (SC)), that the "place of removal" cannot be the buyer's premises, and thus, freight charges to the buyer's premises should not be included in the assessable value.

2. Determination of the "Place of Removal":
The Revenue's position was that since the delivery was to the buyer's premises, the buyer's premises should be considered the "place of removal." This was based on the inclusion of freight charges in the invoices. The appellants countered this by stating that the property in goods is transferred at the factory gate, and hence, the sale is on an ex-factory basis. They cited Section 39 of the Sale of Goods Act, 1930, which deems goods delivered to the buyer when handed over to the transporter. The appellants also highlighted that their agreements with buyers required inspection at the factory, indicating the transfer of property at the factory gate.

3. Application of Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000:
The Revenue invoked Rule 6, treating the freight amount as additional consideration. The appellants argued that Rule 6 was inapplicable as the freight could not be considered additional consideration. They emphasized that the issue was purely legal and there was no malafide intention to evade duty.

4. Limitation and Malafide Intention:
The appellants argued that there was no malafide intention to evade duty, and the issue was purely legal. They contended that the demand notice was time-barred due to the absence of any fraudulent intent.

Tribunal's Findings:
The Tribunal referred to the Supreme Court's decision in Ispat Industries Ltd., which clarified that the "place of removal" refers to locations related to the manufacturer, not the buyer. The Tribunal noted that the buyer's premises could not be considered the "place of removal." The Tribunal also addressed the Revenue's reliance on the Roofit Industries Ltd. case, distinguishing it based on the facts and the Supreme Court's interpretation in Ispat Industries Ltd.

The Tribunal concluded that the buyer's premises could not be the "place of removal" and thus, freight charges to the buyer's premises should not be included in the assessable value. Consequently, the demand for duty, interest, and penalty was set aside.

Conclusion:
The appeal was allowed, and the impugned order was set aside. The Tribunal held that the buyer's premises could not be considered the "place of removal" under Section 4 of the Central Excise Act, 1944, and freight charges should not be included in the assessable value of the goods. The demand for duty, interest, and penalty was annulled.

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