TaxTMI 
TaxTMI 
2009 (12) TMI 416
X X X X Extracts X X X X
X X X X Extracts X X X X
....ese two periods was provisional. The provisional assessments were finalised by the Jurisdictional Deputy Commissioner, Central Excise vide order-in-original dated 24-1-02 in respect of period from March, 1997 to July, 2001 and vide order-in-original dated 2-7-02 in respect of period from December, 2001 to March, 2002, By these two orders, the Deputy Commissioner -(a) allowed the exclusion of transport charges from the place of removal to the customer's premises but disallowed the exclusion of transport charges from the customer's premises to other places; (b) allowed the exclusion of the Commercial tax/Central sales tax payable by the appellant whose payment had been deferred; (c) allowed the exclusion from the assessable value the bank collection charges which the bank were charging in respect of outstation cheques received from the outstation buyers; (d) disallowed the exclusion from the assessable value of the turnover discount on the ground though it is claimed by the appellants, it is not backed by any price list circular indicating the criteria for its availability and (e) allowed the exclusion from the assessable value trade discounts upto 20%, wherever the same had been pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... receivable from the buyers and paying duty on the remaining assessable value. Hence, the differential duty has to be demanded on the free of cost supplied goods to the customers, as well as on the so called deduction claimed for the short fall in payment for the excisable goods supplied during the previous year, as no such provision exists in the Central Excise law. 1.4 It is against this order of CCE (Appeals) that these two appeals have 2. Heard both the sides. 2.1 Shri Shekhar Vyas, learned advocate on behalf of the appellant made the following submissions (i) While in respect of sales from depots, the cost of transportation from the factory gate to the depot is includable in assessable value and there is no dispute about it, the cost of transportation from the depot to the buyer's premises is not includable in the assessable value, as while transportation costs are not shown separately in the excise invoices, the same have been shown separately in the commercial invoices and evidence in support of the expenses incurred on the transportation is available. Therefore, the Commissioner (Appeals) has wrongly disallowed the deduction of the transportation cost from the place of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is on the question as to whether in this case exclusion of expenses of transportation of the goods from the place of removal to the customer's premises is permissible in terms of the provision of Section 4 read with the Central Excise Valuation Rules. 4.1.1 The period of dispute in this case is from March, 1997 to March, 2002. With effect from 1-7-2000, the old Section 4 of the Central Excise Act, 1944 and Central Excise Valuation Rules, 1975 were replaced by new Section 4 based on transaction value concept and the Central Excise Valuation Rules, 2000. In sub-section (2) of Section 4, as it stood prior to 1-7-2000, there was a specific provision relating to the cost of transportation from the place of removal to the place of delivery, which is reproduced below: "Where, in relation to any excisable goods, the price thereof for delivery at the place of removal is not known and the value thereof is determined with reference to price for delivery at a place other than the place of removal, the cost of transportation from the place of removal to the place of delivery shall be excluded from such price." Based on this clear provision of Section 4(2), Hon'ble Supreme Court in the case ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se of CCE, Mumbai-III v. Supreme Petrochem Ltd. reported in 2009 (240) E.L.T. 38 (Tri.-LB) has held that since the transaction value depends on the contract between the seller and buyer and the Revenue is not privy to transaction of sale, the burden of proving that outward handling charges or loading charges were incurred by somebody else and are excludible from the assessable value, is on the Assessee, Applying the ratio of this judgment, if cost of transportation from the place of removal to the place of delivery is not separately charged and shown in the invoice, but the assessee claims that the price includes the cost of such transportation, and claims its deduction, the burden of proving this will be on him. 4.1.1 In this case, while in the excise invoices, the cost of transportation from the place of removal has not been shown the Appellant claim that the same has been mentioned separately in the commercial invoices, and is backed by the Transporter's bills This claim of the Appellant has to be verified and deduction can be allowed only if it is found to be correct and only of the expenses actually incurred on transportation from the place of removal to the place of delivery....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d on to the buyers. Though these judgments of Hon'ble Supreme Court are in respect of old Section 4, the principles laid down in these judgments are valid for new section as it stood w.e.f. 1-7-2000 as the deduction of discounts given by an assessee as per terms of the sale and established trade practice and which are known prior to removal of goods and are actually passed on to the customer is in accordance with the concept of transaction value. However in terms of the Larger Bench judgment in case of CCE, Mumbai v. Supreme Petrochem Ltd. (supra) the burden of proving that the discounts were actually given and passed on the customers would be on the Assessee. The Department's objection is that most of the discounts were not known in advance, as there was no price list or price circulars mentioning such discount and also laying down the criteria regarding their eligibility and that in some cases these discounts have not been passed on. This again is a point of fact which has to be determined by the original Adjudicating Authority as the impugned order in appeal does not give any factual details on the basis of which he has given his finding on this point. How ever, a discount which....