2005 (4) TMI 73 - SC - Central Excise

Supreme Court remands transportation cost deduction case, emphasizes correct assessment queries

The Supreme Court set aside the Tribunal's decision regarding the deduction of transportation costs for exported goods and remanded the case for ... Valuation (Central Excise) - Validity of Tribunal's order - Tribunal proceeded on the basis as if the issue was whether the expenses incurred by the appellant in transporting the goods meant for export were to be deducted from the price of the goods sold for domestic consumption in arriving at the assessable value of the goods sold domestically - grievance of the appellant is that the question framed by the Tribunal was wholly wrong - Held that:- There appears to be some confusion as to the factual and legal basis on which the original order of assessment had been passed. But it appears that the questions as formulated by the appellant should have arisen for consideration by the Tribunal - Matter remanded back - Decided in favor of Revenue. Issues:1. Valuation of goods for export - exemption on freight and insurance charges.Analysis:In the case, the appellant, a manufacturer of two-wheelers, exported some goods and sold others domestically. The appellant claimed exemption on freight and insurance charges for the exported goods, arguing that these expenses should be deducted while determining the value of the exported goods. The Central Excise Officer initially denied this exemption, but the Commissioner (Appeals) supported the appellant's position, stating that the expenses should be deducted under Section 4 of the Central Excise Act, 1944.The Tribunal, however, incorrectly framed the issue as whether the expenses for transporting goods for export should be deducted from the price of goods sold domestically. The Tribunal concluded that the expenses for exported goods should not be deductible from the price of goods sold domestically, a decision with which there was no dispute as a proposition of law. The appellant contended that the Tribunal's question was incorrect and should have focused on specific queries related to the calculation of equalized freight and the deduction of transportation costs for exported goods.The Supreme Court noted the confusion in the original assessment order but agreed with the appellant that the Tribunal should have considered the specific questions raised by the appellant. Consequently, the Court set aside the Tribunal's order and remanded the matter back to the Tribunal for a proper determination based on the questions formulated by the appellant. The appeals were disposed of without any order as to costs.