TaxTMI 
TaxTMI 
2017 (7) TMI 556
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....gents and such commission was not included in the assessable value. A show cause notice was issued alleging suppression of value and demanding duty of Rs. 28,39,406/- for the period 2002-2003, 2003-2004, 2004-2005, 2005-2006 and 2006-2007. The matter was adjudicated and the entire demand was dropped by the adjudicating authority. The Revenue went in appeal. In the first appellate proceedings, the Ld. Commissioner (Appeals) held that the transport charges as well as all the costs to maintain such depot/commission agents have to be included in the assessable value. Aggrieved from the said order, the appellant have filed this appeal. 3. Ld. Consultant for the appellant submits that the amount of commission was already included in the value of the goods and hence commission could not be included further. He further stated that the consignment agents after sale of goods retain their commission from the sale proceeds and rest of the amount is remitted to the appellants. Regarding inclusion of transportation cost, ld. Consultant relied upon the Board Circular No.251/85/96-CX dt. 14.10.1996 and stated that duty was required to be paid on the value of the goods prevailing at the time of th....
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....s, in case of sale from depot/place of consignment agents, duty is payable on the price prevailing at the depot as on the date of removal from the factory. For proper appreciation of the issue, it is also necessary to refer to Rule 5 of Central Excise Valuation Rules, 2000 after it substituted the earlier Rule 5 on 01.03.2003:- "Rule 5. Where any excisable goods are sold in the circumstances specified in clause (a) of sub-section (1) of section 4 of the Act except the circumstances in which the excisable goods are sold for delivery at a place other than the place of removal, then the value of such excisable goods shall be deemed to be the transaction value, excluding the cost of transportation from the place of removal upto the place of delivery of such excisable goods. Explanation 1. - "Cost of transportation" includes - (i)the actual cost of transportation; and (ii)in case where freight is averaged, the cost of transportation calculated in accordance with generally accepted principles of costing. Explanation 2. - For removal of doubts, it is clarified that the cost of transportation from the factory to the place of removal, where the factory is not the place of removal....
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....s the price for delivery of the goods at the time and place of removal and if in case of sale from depot, the freight expenses from depot to customers premises are included, the price would cease to be the price at the place of removal. Therefore, the freight expenses from the depot to customer's premises would have to be deducted for arriving at the assessable value. However, the evidence with regard to the quantum of freight expenses from depot to customer's premises would have produced by the appellant." In view of above, the transportation/freight charges in show cause notice for the period 14.05.2003 to 31.03.2004, 2004-2005, 2005-2006 and 2006-2007 are liable to be included in the assessable value. However, for the period prior to 14.05.2003 when the definition of place of removal in Section 4 of Central Excise Act, 1944 did not include depot as place of removal, the place of removal will be factory gate and for this period, the transportation/freight charges would not be includible in the assessable value. As to the contention of the appellant about order of the Ld. Commissioner (Appeals) dt. 12.03.2004, the same pertained to issue of differential value; besides, th....
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.... May, 2006 along with relevant sales notes issued by their agents corresponding to the invoices, they submitted some copies of invoices for each month along with relevant sale notes issued by their agents corresponding to the invoices. On examination of all the invoices & sales notes, it was found that in most of the cases, the sale value is higher than the value declared in their invoices. It can also be seen from the case records that the Respondent are maintaining and keeping all their old records in their office situated at Patna, and since they were not cooperating in submitting the required information/book of accounts after several requests/reminder made by the department forced to the Superintendent, Central / Excise Range, Hajipur to issue a summon under Section 14 of the Central Excise Act, 1944 to produce all the required figures on 08.02.2008. I find that in response to the summon dt. 06.02.2008, they submitted some documents and figures on 08.02.2008 and rest documents and figures on 11.02.2008. I find that the Respondent has raised the issue regarding various means can be undertaken by the department to dig out truth by enforcing search & raids in the factory as w....