TaxTMI 
TaxTMI 
2022 (12) TMI 133
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....learance of cement can be broadly categorized into following two types: (i) Clearance to their depots and consignment agents, from where the goods are sold; (ii) Clearance to industrial users and bulk consumers which were delivered on Free On Road (FOR) basis. 3. Scrutiny of records by Revenue pertaining to sales and supplies of cement dispatched to bulk consumers / industrial users, it was observed that they were selling their goods on FOR basis dispatched by road including packing, forwarding and unloading charges and also including the cost of freight charges. It appeared to the Revenue that the assessee are supplying the final products to the customers' destination/address i.e. at various delivery places as stipulated in the agreement/ purchase order. It was further observed that cost of transportation incurred from the factory to the place of removal (destination) was not included for arriving at the 'assessable value' during the relevant period, and thereby it appeared that the assessee have short paid the Central Excise duty on such goods. Appeal No. E/30164/2019 (By assessee) 4. Show Cause notice dated 5.9.2018 was issued (Mallacheruvu works, C.E.....
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....chasers' site; that it appears that the sale or clearance of goods does not take place at the factory gate of the assessee but at the place of buyer on the delivery of goods. It was further observed that as per section 19 of the Sale of Goods Act, property in goods, in effect, passes to the buyer only at the buyer's premises on its delivery. It was further observed that the assessee have paid VAT/ Sales Tax on the price which is inclusive of the cost of transportation. This fact also indicates that in fact the sale took place at the buyer's premises. It was further observed that under section 20 of the Sale of Goods Act, it is provided - "Where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment of the price or the time of delivery of the goods, or both, is postponed". Further it was observed that in the facts of the present case, the contract were not unconditional, as there are conditions specified for acceptance of the goods. The fact in the present case 'deliverable state' of goods, arises only at the time of safe delive....
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....erest. Further, penalty of Rs.20 lakh was imposed under section 11 A (1)(a) of the Central Excise Act. Being aggrieved the appellant is in appeal. 9. Learned Counsel inter alia urges that the issue for determination is to determine the 'place of removal' in terms of section 4 (3) (c ) (iii) of the Act, read with section 4(1)(b) of the Act and explanation to Rule 5 of Central Excise (Determination of Price of Excisable Goods), Rules 2000 for the purpose of arriving at the transaction value. 10. The place of removal is the factory gate of the appellant as per the appellant, and it is the premises of the Customers, where the delivery of goods have been made, as per the Revenue. That the Board had issued a clarification by its clarificatory Circular dated 8.6.2018 referring to its earlier Circular(s) with respect to the subject 'place of removal' under section 4 of the Act, the CENVAT Credit Rules and drawn attention to the four judgment of the Apex Court namely; 1. Roofit Industries Ltd. [2015 (319) ELT 221(SC)] 2. CCE vs Ispat Industries Ltd. [2015 (324) ELT 670 (SC)]; 3. CCE, Mumbai III vs Emco Ltd. [2015(322) ELT 394 (SC)] 4. CCE & ST vs Ul....
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....mco Ltd. (supra) and CCE v. M/s. Roofit Industries Ltd. (supra). That is, where the ownership, risk in transit, remained with the seller till goods are accepted by buyer on delivery and till such time of delivery, seller alone remained the owner of goods retaining right of disposal. The said circular further provides that the guidelines and the judgment of Apex Court may be referred to and based on facts and circumstances of each case. Further provides past cases should be accordingly decided. 12. Learned Counsel further urges that the facts of the present case are squarely covered by the principle laid down by the Hon'ble Sup. Court in the case of Ispat Industries Ltd. (supra). With effect from 14.5.2003 section 4 was again amended so as to re-include sub-clause (iii) of old Section 4(3)(b) (pre 2000). The amended Section 4(3)(c)(iii) reads as follows :- "(3)(c)(iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory;" Further, Rule 5 of the Central Excise Valuation Rule was also substituted, with effect from 1-3-2003, and read as follows : "Rule 5. Whe....
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....for delivery at the buyer's premises, has been settled at the hands of Hon'ble Apex Court and has reached finality with the following observation: "10....it is now well settled that the buyers' premises can never be the place of removal, therefore the freight from the factory/depot/consignment agent up to the buyers' premises cannot be included in the assessable value, even if the goods are sold or delivered at the buyer's premises. In view of the above, we find that the settled legal position is in favour of the appellants and against Revenue and the demands are unsustainable on merits and need to be set aside and we do so. Since we have taken a decision on the merits of the case, the issue of limitation becomes irrelevant." Further, a similar view was taken in M/s. Vijai Electricals Ltd., Vs. Commissionerate [2019 (11) TMI 301- CESTAT]. 15. Similar view was also taken up by the CESTAT Ahmedabad Bench in the case of Commissioner of Central Excise, Mumbai-IV Vs Emco Ltd. [2016 (12) TMI 1385-CESTAT MUMBAI] and M/s. Savita Oil Technologies Ltd., Vs. C.C.E. & S.T., Daman [2022 (7) TMI 138- CESTAT Ahmedabad]. 16. It is further urged that Hon'ble Supre....
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.... the appeal. 18. Having considered the rival contentions, we find that under the similar facts and circumstances, the Apex Court (in Ispat Industries) distinguishing its earlier ruling in the case of Roofit Industries, have held that the place of removal referred to in Section 4 r/w Rule 5 and Rule 7 of Central Excise Valuation Rules, clearly indicates, that the place of removal refers to only the sellers premises (factory gate, warehouse, depo, consignees premises). It is nowhere stated that the buyer's premises can be place of removal. Hon'ble Apex Court also observed that in the Roofit case, it did not have occasion to examine the provisions of Section 4, since it was enacted and amended from time to time in the Central Excise Act r/w the Valuation Rules. After examining Section 4 r/w the rules, the Apex Court observed that the cost of transportation from the place of removal up to the place of delivery of excisable goods is excluded from 'Assessable value' for the computation of excise duty. 19. In view of aforementioned observations and findings, we allow this appeal and set aside the impugned order. Appeal No. E/30214/2020 (by revenue with cross objection by the asse....
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....enue was allowed. 24. The issue involved in these appeals relates to determination of assessable value for the purpose of payment of duty. The appellant in the normal course of business was paying the duty by calculating the assessable value for sales made to institutional buyer's on FOR destination basis. Admitted fact is that as per the various purchase orders, the price is inclusive of freight element, as well as taxes in most of the cases. The appellant have cleared the goods from their factory to the institutional buyer's by raising the excise invoice, wherein, the amount of freight has been separately shown. The appellant (Vijag Unit Regn. No. AABCM9480CXM002) was regularly filing their returns and paying the admitted amount of duty (without including the freight). 25. Based on the Audit observations made in Letter C. No. V/1/286/2014-Audit Gr.I dated 07.04.2015 issued by the Superintendent (Audit), Group-I, Kakinada Circle, from the Office of the Asst. Commissioner of Central Excise & Service Tax, Audit Commissionerate, Kakinada Circle to provide the details of differential duty liability i.r.o. clearances made to depots for the period from 17.03.2012 to 31.12.2014 and....
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....,532 33,93,468 6,71,030 8,538,030 2012-13 3,02,51,804 37,39,124 21,23,622 5,60,869 6,423,615 2013-14 6,42,36,585 79,39,640 30,67,692 11,90,946 12,198,278 2014-15 6,77,99,620 74,95,107 8,71,752 11,24,266 9,491,125 2015-16 upto 8th Jun-15 1,88,18,760 23,52,345 18,246 0 2,370,591 Total 24,01,01,385 2,76,61,012 1,09,24,327 37,96,301 4,23,81,640 28. Upon verification of above refund claim, the Appellant were issued a Deficiency Memo vide letter C. No. V/18/454/2016- Refund (My Home) dated 25.08.2016 and a reminder letter asking them to furnish certain documents/information, etc. observing the following discrepancies/deficiencies. (i) Audit note issued was in the nature of communicating tentative observations of audit seeking their view points and requesting to pay the liability, if agreeable. Further the audit has not quantified the duty liability and only called for relevant documents for the period from 17.03.2012 to 31.12.2014. Therefore, the assessee's contention that the subject amounts are paid pursuant to the directions of audit appears to be incorrect. (ii) ....
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....jection on merits, the refund claim to the extent of Rs. 1,04,33,389/- out of the total amount of Rs.4,23,81,640/- is also hit by limitation of time under Section 11B of the Act, since the refund claim has been filed on 12.08.2016 i.e., after one year from the date of payment of duty. 31. The Appellant preferred an Appeal against the above Adjudication order dated 17.02.2017 before the Commissioner (Appeals) contesting both on merits and also that the provisions of Section 11B of the Act, on the limitation stipulated therein, is not applicable. The Revenue also filed cross-appeal against the said order, on the ground that-on the audit intervention, the Appellant had suo-moto paid Rs. 2,55,27,656/- as CE duty with interest Rs.1,10,23,634/- and reduced penalty Rs. 38,29,149/- and vide Letter dated 22.12.2015, admitted the non-inclusion of freight charges in the assessable value was a mistake on their part and requested to drop further proceedings. Since the proceedings are deemed to have been closed under Section 11AC(d), thus the Appellant does not have right to claim any consequential refund. 32. Thereafter, the Appellate Commissioner vide Order-in-Appeal Nos. 093-094-18-19 d....
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....y, no such closure of audit observation was issued. Further, no show cause notice, which is the condition precedent under Section 11AC (1) (d), was issued and thus, there is no closure of the dispute in the spirit of the said section. This fact is also evident from the show cause notice dated 28.11.2016, issued in response to filing of refund application in para 4 of the SCN, revenue has referred to the defect memo reiterating that the letter dated 07/04/2015 of the audit was in the nature of communicating tentative observation of the audit, seeking the view point of the assessee and requesting to pay the duty/liability, if agreeable. Further, audit had not quantified the duty liability and had only called for the relevant documents for the period from 17.03.2012 to 31.12.2014. 36. Thus, the amounts paid towards duty/interest/penalty still remains to be 'Revenue deposit', since no SCN was issued for appropriating the said amounts and/or no letter for conclusion of the proceedings in respect of amounts paid towards the levies (short paid) was issued. Accordingly, the refund amounting to Rs. 1,04,33,389/- invoking time limit under Section 11B of the Act, cannot be sustained. In th....
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.... Rs. 38,29,149/- as stated in the Revenue's grounds of appeal. (b) Secondly, the amounts actually paid upon receipt of letter dated 07.04.2015 issued by the audit team towards duty, interest and penalty are Rs.90,12,460/-, Rs.15,80,735/- and Rs.13,51,869/- respectively. This position is very clear from the letters dated 24.11.2015 and 26.11.2015 (c) Thirdly, as can be seen from the letter dated 26.11.2015, the Appellant had asked only for issuing a 'letter for closure' of audit observation for record. Thus, the new ground raised in the cross-appeal, besides being making out entirely a new case, which is not permitted in law, is also based on incorrect facts. 39. Further, the ground taken by the revenue of closure of the matter, is also bad in law as Section 11AC (1)(d) provides for payment of interest and 15% penalty, within 30 days from the date of issue of SCN, and only then the proceedings resting with such SCN is deemed to be concluded. In absence of any show cause notice, Section 11Ac (1)(d) has got no application. 40. It is further urged that, if the amounts paid are towards conclusion of the proceedings, as claimed by the Revenue, then the amounts ....