2016 (8) TMI 443

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....removal of goods from the factory gate, have been allowed by setting aside the Order-in-Original passed by the Joint Commissioner. 2.1 Thus the issue involved herein is :- the freight element or cost of transportation incurred after the point of removal of goods from the factory gate is to be included in the value of the goods or not. 3. The Revenue represented by ld.A.R., Shri Rajeev Ranjan, mainly argues that the cost of transportation is a part of the value of the goods and transportation cost incurred for transporting the goods to the buyers place, is to be included in the value of the goods for the purposes of duty of Central Excise. He argues that the freight charges recovered on equalized/average basis though on separate invoi....

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....tion of the goods between the assessee and the buyer. In such cases, the payment made by the buyer to the assessee on account of transportation was not in connection with the sale, as the sake was over at the factory gate itself. It was also possible that the assessee may charge some amount over and above the actual freight and insurance cost incurred by him, even then such additional charge should not be includible in the assessable value of the goods." 6.1 From the record, we note that there are two separate contracts, one is for sale and another is for transportation, packing, forwarding and insurance purposes. One cannot say that the sale of the goods was not completed at the factory gate. Another contract for transportation, packi....

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....ase of Majestic Auto, this issue has already been decided allowing deduction of equalized freight also." 6.2 Further, the Hon'ble Supreme Court in the case of M/s Ispat Industries Ltd., has held that the actual cost of transportation from the place of removal, upto the buyer's place is to be excluded for valuation of goods for the purposes of computation of Excise duty, provided it is charged separately to the buyer in addition to the price of goods. In this regard, we quote Para 21 of the said decision, as below : "21. The actual cost of transportation from the place of removal up to the place of delivery of excisable goods is excluded from the computation of excise duty provided it is charged to the buyer in addition to the pr....