2009 (5) TMI 298

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.... respondents are manufacturers of yarn; they removed the consignments of yarn on "invoices" to their depots; and in the said invoices, they mention freight and insurance at the rate of 1.3% of the value of the goods; from the depots, they are selling the goods to various customers and the rates mentioned in the "invoices" from the factory to depot and the depot to customers are the same. They are not collecting any amount extra towards freight and insurance from the depot to the premises of the customers. The original authority held that the goods are being actually sold from the depots and the depots should be considered as place of removal and as a result the amount of 1.3% of value of goods collected towards freight and insurance should ....

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....h goods during transit to buyer". 5.1 We have carefully considered the submissions from both sides. The "invoices" raised by the respondents to the depots are for the purpose of transfer and no sale is involved. It cannot be considered to be a case of factory recovering freight from the depots as both the are parts of same legal entity. The actual sale in the present case is only from the depots. During the period from 28-9-96 to 30-6-2000, it is admitted that the place of depot is also considered as place of removal and duty was payable based on the sale price at the depots, in respect of clearances made from the factory. That being the case, the exclusion of the freight and insurance element from the factory gate to the depots is not war....