TaxTMI 
TaxTMI 
2019 (10) TMI 5
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....1944, the 'place of removal' in cases where goods are sold after their clearance from the factory, such place of sale is the 'place of removal'. The relevant portion of Section 4 is as below. "Section 4. Valuation of excisable goods for purposed of charging duty of excise: (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall - (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed. ................. 3 (c) "place of removal" means - (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) a depot, premises of a consignment agent or any other place or ....
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.... the first appellate authority who allowed their appeal distinguishing their facts from the judgment of the Hon'ble Apex Court in the case of Roofit Industries Ltd (supra). Para 11.7 of the order of the first appellate authority is as below. "11.7 Therefore, considering the purchase orders examined above, I am of the considered opinion that there are no controls or obligations on the part of the appellant to supply the goods at the buyer's premises under conditions of acceptance on testing or approval at the buyer's premises failing which the goods could not be accepted for delivery. Perusal of the Pos revealed that there were pre-dispatch inspections and goods to be delivered along with the dispatch clearance report provided by the buyer on inspection of the goods at the factory of manufacture or approved inspection report. Any other defects or damages would only be subject to in-process activity for which conditions are laid out which is normal in any contract of supply. Conditions for replacement of goods within specified period is not a consideration for determining the place of supply as the Adjudicating Authority has inferred from the PO examined in para 26.2. The Adjudica....
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....xamining the records, we find that the short point to be decided is in cases where the goods are sold on FOR basis whether the place of removal shifts to the buyer's premises or it will continue to be at the seller's premises. Such a decision has two implications. First, the assessable value of goods under section 4 must include the costs of transportation and transit insurance if the place of removal shifts to the buyer's premises. Second, the assessee will be eligible for Cenvat credit of the costs of the transport incurred in transporting the goods from their premises to the buyer's premises. On the other hand, if the place of removal continues to be the seller's premises then the value cannot include the cost of transportation and transit insurance incurred for transporting the goods from the seller's premises (factory, depot, place of consignment, etc.) to the buyer's premises. Conversely, the assessee will also not be entitled to Cenvat credit of the transport of goods from their factory to the buyer's premises. 8. In the case of Roofit Industries Ltd (supra), Hon'ble Apex Court held that where the sale takes place for delivery at buyer's premises (FOR basis) the place of r....
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.... by the words "have been sold" which would then possibly have reference to the buyer's premises." 10. Referring to the earlier judgments the Hon'ble Apex Court held that "also this court's attention was drawn to Section 4 as originally enacted and as amended to demonstrate that the buyer's premises cannot in law be 'place of removal' under the said section". In other words, the Hon'ble Apex Court has held that buyer's premises can never be the place of removal because the goods have to be sold after their removal and if they are already sold at the buyer's premises nothing more needs to be done. Further, there is no scope for removal once the goods are already sold and reached the buyer's premises. Further, it was also held that if the intention was to include the cost up to the place where goods are to be sold, the expression "goods are to be sold" must be replaced by "goods have been sold". Since goods have to sold from the place of removal, it has to be definitely a place before buyer's premises and it has to be the seller's premises or other premises such as depots and consignment agent which are relatable to the seller. 11. Further, the Hon'ble Apex Court has in the case o....