TaxTMI 
TaxTMI 
2021 (9) TMI 29
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....ight appeals filed by the Revenue, the eight appeals being Ex.Appeal Nos.E/700/2011, E/776-779/2011 & E/75148-75150/2015, are filed for withdrawal as prayed by the Revenue in terms of litigation policy vide Board's instruction being F.No.390/Misc./116/2017-JC dated 22.08.2019 2. Accordingly, the prayer for withdrawal of the appeals by the Revenue, is granted and the Ex.Appeal Nos.E/700/2011, E/776-779/2011 & E/75148- 75150/2015, are dismissed as withdrawn under National Litigation Policy. Cross Objection No.124/2011 in Excise Appeal No.779 of 2011 also gets disposed off. 3. Now, we take up the four appeals filed by the assesses for final disposal. 4. Briefly stated, the facts of the case are that the assessees were engaged in the manufacture and sale of Ferro Alloys, Ferro Silicon and Ferro Slag classifiable under Chapter 72 of the Central Excise Tariff Act, 1985. The assessee's units were located within the State of Meghalaya and enjoyed the benefit of Central Excise duty exemption under Notification No. 32/99-CE dated 08.07.1999, as amended. The said notification operated by way of refund, where under the assessee first paid the Central Excise duty leviable on the clearances o....
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.... assessee was that the relevant contracts/ purchase orders for sale of finished products stipulated FOR destination prices. The ownership and possession of the goods remained with the assessee (sellers) until the goods were delivered at the premises of their buyers (purchasers) and the same were accepted. The assessee had contended that the act of sale occurred at the buyers' premises and therefore, duty had been paid correctly considering the value of goods inclusive of transportation charges upto the buyers' premises. There was nothing in the Valuation Rules, 2000 which stated the contrary. The assessee also contended that even if the transportation charges were not includible for the purpose of Central Excise valuation, the Department was bound to refund the duty element paid thereon. The demands were also contested on the ground of limitation. 7. After adjudication of the aforesaid Show Cause Notices, the matters went upto the Commissioner (Appeals), Guwahati, who disposed of the appeals by separate Orders-In-Appeal. In certain cases, the Commissioner (Appeals) held in favour of the assessee, which orders have been challenged by the revenue while in the other proceedings, the ....
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....nsfer of ownership took place only at the buyer's premises and the instant case was not one involving any ex-factory sale. Accordingly, the 'sales' had taken place at the buyers' premises as per Section 2(h) of the said Act read with the applicable provisions of the Sale of Goods Act, 1930. a) Section 4(1)(a) of the said Act was inapplicable since the goods had not been sold by the assessee for delivery, at the time and place of removal. In the instant case, valuation was governed by clause (b), Section 4(1) of the Act read with the Valuation Rules, 2000. The revenue's reliance upon Rule 5 of the said Rules was misplaced in view of the exclusion appearing in the said Rule itself. On the other hand, the spirit of Rule 7 applied read with Rule 11 of the Valuation Rules, 2000. The transaction value at the place of sale, which was the buyers' premises in the present case, represented the correct value for payment of duty. b) Shri Khaitan submitted that the assessee's case was similar to the facts in the case of Commissioner of Customs and Central Excise, Aurangabad - versus - Roofit Industries Limited reported in 2015 (319) ELT 221 (SC). In the said decision which related to FOR sa....
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....tipulated that it was ex-works at the factory gate of the assessee. The payment was to be made before discharge of the goods from the factory premises. In the opinion of the Court, the machinery which was handed over to the career/transporter on receiving the payment was as good as delivery to the buyer in terms of Section 39 of the Sale of Goods Act and, therefore, possession of the sold goods was handed over to the buyer at the factory gate. In this manner, the transaction was full and complete and nothing remained to be done after the goods left the factory premises. On these facts, provisions of Section 4 of the Act, which deals with valuation of excisable goods for the purposes of charging of duty of Excise was taken note of and analysed, holding that the aforesaid charges could not be included for the purpose of arriving at valuation of excisable goods. ......................... 12. The principle of law, thus, is crystal clear. It is to be seen as to whether as to at what point of time sale is effected namely whether it is on factory gate or at a later point of time, i.e., when the delivery of the goods is effected to the buyer at his premises. This aspect is to be seen i....
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....n Rules. In the present case, we find that most of the orders placed with the respondent assessee were by the various government authorities. One such order, i.e., order dated 24-6-1996 placed by Kerala Water Authority is on record. On going through the terms and conditions of the said order, it becomes clear that the goods were to be delivered at the place of the buyer and it is only at that place where the acceptance of supplies was to be effected. Price of the goods was inclusive of cost of material, Central excise duty, loading, transportation, transit risk and unloading charges, etc. Even transit damage/breakage on the assessee account which would clearly imply that till the goods reach the destination, ownership in the goods remain with the supplier, namely, the assessee. As per the "terms of payment" clause contained in the procurement order, 100% payment for the supplies was to be made by the purchaser after the receipt and verification of material. Thus, there was no money given earlier by the buyer to the assessee and the consideration was to pass on only after the receipt of the goods which was at the premises of the buyer. From the aforesaid, it would be manifest tha....
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.... in law, be "a place of removal" under the said Section. 33. As has been seen in the present case all prices were "exworks", like the facts in Escorts JCB's case. Goods were cleared from the factory on payment of the appropriate sales tax by the assessee itself, thereby indicating that it had sold the goods manufactured by it at the factory gate. Sales were made against Letters of Credit and bank discounting facilities, sometimes in advance. Invoices were prepared only at the factory directly in the name of the customer in which the name of the Insurance Company as well as the number of the transit Insurance Policy were mentioned. Above all, excise invoices were prepared at the time of the goods leaving the factory in the name and address of the customers of the respondent. When the goods were handed over to the transporter, the respondent had no right to the disposal of the goods nor did it reserve such rights inasmuch as title had already passed to its customer. On facts, therefore, it is clear that Roofit's judgment is wholly distinguishable. Similarly in Commissioner Central Excise, Mumbai-III v. M/s. EMCO Ltd., this Court re-stated its decision in the Roofit Industries' case....
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....essee incorporated details of the relevant purchase orders issued by the buyers and as the agreed upon price was as per FOR destination, there was no reason to charge any freight component separately. 13. Sale has been defined under Section 2(h) of the said Act as follows : "sale" and "purchase", with their grammatical variations and cognate expressions, mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration; Thus, under the Act sale takes place only upon transfer of the possession of the goods by the manufacturer to the buyer, which occurred in the present cases at the buyers' premises. 14. The parties intended that the sale of goods would take place at the premises of the buyers and that such premises would be considered to the Point of Sale, where the title and property in the goods were actually transferred. 15. We are of the view that the invocation of Rule 5 of the Valuation Rules, 2000 by the Revenue was misplaced. The said Rule applied to cases only where goods were sold at the place of removal but were to be delivered elsewhere, which condition coul....
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....otification in question i.e. Notification No.32/99 dated 08.07.1999. After examining the contract in light of the principles enunciated for determination of place of removal vis-à-vis point of sale and discussing the aforementioned decisions of Roofit Industries and Ispat Industries Ltd., supra, this Tribunal had held that the property in the goods was intended to pass at the buyer's premises and, therefore, the assessee therein was not required to deduct the cost of transportation for Central Excise valuation purposes. 20. The decision in the case of Montage Enterprises (supra), cited by the revenue, is distinguishable and its ratio is inapplicable to the situation at hand. To begin with, the said decision related to the Notification No.56/2002-CE dated 14.11.2002 and the appellant therein had not established that the buyer's premises was the point of sale. Moreover, it was not brought to the notice of this Tribunal that the decision of Ispat Industries (supra) related to an ex-factory sale. The Valuation Rules, 2000 were also not discussed at length. We are of the view that the judgment in the case of Roofit Industries (supra) hold the field and is to be respectfully foll....
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....cem India vs. UOI 2021 (376) ELT 573. In that case also, refund was sanctioned of the cess amount alongwith the basic excise duty in terms of the exemption notifications issued in the north-eastern states. The said notifications provided for exemption by way of refund of the duty paid through account current (PLA). By a subsequent decision of the Supreme Court in Unicorn Industries, it was held that the previous decisions of the Supreme Court in S.R.D. Nutrients case which upheld exemption of the cess amount was held to be per-incurium. As a result thereof, the Department proceeded to recover the cess amount refund of which was already sanctioned by terming the said refund to be "erroneous". The Gauhati High Court clarified the position that refund already sanctioned by taking the support of the legal precedents holding the field then cannot be termed as erroneous merely because of the change in legal position subsequently. The Court noted as below:- "46. "Erroneous Refund" The provisions of Section 11A in the context of the present proceedings have been invoked by the Department by treating the refunds granted earlier to the petitioners to have been granted "erroneously". A pe....