2020 (7) TMI 318

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....nts. On being successful in their bids, purchase orders were issued in favour of the appellants mentioning value and tax at Ex-works/Ex-factory and freight and insurance separately. The contract is on terms of FADS (Free at Destination Stores). Thus the appellant is responsible for delivery of the transformers at the buyers premises (Destination Stores) after which they are free. 2. The appellant paid excise duty on the value Ex-works/Ex-factory but Revenue is of the opinion that the sale of goods being on FADS basis, the property gets transferred to the buyers only at the destination stores and therefore the "place of removal" under Section 4 shifts to the buyers' premises. Consequently, the cost of transportation and transit insurance fr....

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....at the "place of removal". Earlier, in the case of Roofit Industries Ltd., [2015 (319) ELT 221 (S.C.)] Hon'ble Supreme Court has observed that where the goods are sold on FOR destination basis the sale is not complete until the property is passed to the buyer which takes place only at the buyer's premises. Accordingly, the "place of removal" shifts from the seller's premises to the buyer's premises in such cases. Subsequently, in the case of Commissioner of Customs and Central Excise, Nagpur Vs Ispat Industries Ltd., [2015 (324) ELT 670 (S.C)] the Hon'ble Supreme Court has held that the buyer's premises can never be the "place of removal" and the place of removal has to be the seller's premises or a place relatable to them. Para 22, 23 and....

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....xcisable goods." 23. It is clear, therefore, that on and after 14-5-2003, the position as it obtained from 28-9-1996 to 1-7-2000 has now been reinstated. Rule 5 as substituted in 2003 also confirms the position that the cost of transportation from the place of removal to the place of delivery is to be excluded, save and except in a case where the factory is not the place of removal. 24. It will thus be seen that, in law, it is clear that for the period from 28-9-1996 up to 1-7-2000, the place of removal has reference only to places from which goods are to be sold by the manufacturer, and has no reference to the place of delivery which may be either the buyer's premises or such other premises as the buyer may direct the manufacturer to sen....