TaxTMI 
TaxTMI 
TaxTMI 
2007 (11) TMI 618
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.... for deductions of actual average freight charges @2.47%, 2.13% and 1.93% for the period 1990-91, 1991-92 and 1992-93. Aggrieved by such order, the appellant preferred an appeal to the Commissioner(Appeals). The Commissioner(Appeals) held that additional freight charges collected in excess of equalized freight cannot be considered as assessable value and is a profit on activity of transport of goods and, hence, set aside the order-in-original. Hence this appeal by the revenue. 3. Ld. Jt. CDR along with Ld. JDR submit that the respondent had claimed deduction of equalized freight from the prices to arrive the assessable value as is borne out from the price list submitted by them. It was submitted that the respondent had claimed deductions from the value on account of freight charges in excess of actual freight charges incurred by them. It is the submission that the actual freight charges were given by the respondent themselves in form of CA certificate. It is the submission that the actual amount of freight charges incurred by the respondent is only deduction that can be permitted to them and any excess deduction claimed by them over and above the actual, are liable to be included ....
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....ting authority at the time of adjudication came to the conclusion that discount claimed by the respondents were in fact passed on by them to their purchasers and hence, proceedings initiated by show cause notice in respect of discount were dropped. In respect of freight charges, the adjudicating authority held that the respondents have claimed excess deductions from the price to arrive at assessable value and hence allowed only that portion of the actual average freight charges from the price and confirmed the demand for the excess amount as claimed by the respondent in the price list. Order of the Ld. Commissioner(Appeals) is relying upon the decision of the Hon'ble Supreme Court in the case of Baroda Electric Meters Ltd. (supra). We find that the respondent had claimed the deduction of the freight charges from the prices for the movement of the goods from their factory premises to their depot. The respondent had worked out an average freight that could be paid by them on the goods cleared by them, based upon the actuals of the earlier financial year. The deductions claimed by the respondent is an average anticipated expense and subsequent actions of arriving at actual freight....
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.... documents and determination of the actual amount incurred as discount like turn over tax and freight actually incurred can be known only at the end of the financial year. It may be pertinent to note that when the price charged from the customer is indicated in the price list showing the price at which the goods have been actually sold and thereafter certain deductions are claimed, which were permissible as per the provisions of the section 4 prevalent during the relevant time, the deductions have to be in accordance with the statutory provisions. In respect of the freight, the relevant provision under which the abatement of freight charges could be availed of was provided for under section 4(2) of the Central Excise Act, 1944 which reads as under:- "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." 11. From the above provisions, it is clear that what is eligible for abatement is the cost of t....
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....ble for verification to see that whether the excess collection was made from the customers representing them as freight charges only. In the present case the appellants have produced commercial invoice and from the invoice, I see that the entire amount has been recovered as price per kilometer cable without showing as to what represents the value and Iwhat accounts for freight. The accompanying gate pass did indicate a lower assessable value/ but it will not make a difference because once the assessee is entitled for deduction of freight from the price charged from the customer, the assessable value has to be lower than the invoice price and once assess-ments are provisional, it cannot be said as to what is the correct assessable value. In view of this/ I set aside the order of Commissioner(Appeals) and hold that the deduction equal to actual equalized transportation charges in-curred shall be allowable and not the average equalized freight charges determined on the basis of last years actuals. Difference of Opinion 12. In view of the above, the following difference of opinion has arisen: "Whether the deduction of equalized freight has to be average equalized freight based on la....