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TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 316
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....ed to sell their finished goods to their customers at FOR price which is inclusive of all expenses upto the place of delivery for which the appellant has valued the price of the finished goods including the freight element in the selling price. The time and place of removal of the goods was at the factory gate and the finished goods are cleared and sold at factory gate and is assessed at the time of removal at factory gate. The buyer is not paying the freight separately and the price fixed by the appellant is sole consideration for determination of the assessable value of the finished goods. The appellant paid the duty and claimed refund during the period September 2005 to June 2010. All duty was paid in cash. A show cause notice was issued ot the appellant alleging that the appellant has erroneously taken the refund of Rs.36,18,110/- by way of overvaluation of the goods by including freight charges in the assessable value in violation of Rule 5 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. The show cause notice was adjudicated and demand on account of erroneous refund was confirmed along with interest and penalty was also imposed. On appeal t....
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.... of buyer can the transportation charges be included in the assessable value or not? The said issue has been examined by this Tribunal in the case of RNB Carbides & Ferro Alloys Pvt.Ltd. (supra), wherein this Tribunal has observed as under :- "11. We have carefully gone through the appeal records and submissions made by both sides including the written submissions. We find that the present dispute falls within a narrow compass as to whether the assessee had correctly availed the benefit of Notification No. 32/99-C.E., dated 8-7-1999 and if not, then whether the Revenue was entitled to recover the refunds already granted claiming it to be a case of "erroneous refund". 12. It has not been disputed that the contracts executed by the assessee were FOR contracts. We note that the contracts/purchase orders specified 'door delivery' at all-inclusive prices. The purchasers reserved the right to inspection and to not accept the goods, in case the goods supplied were found to be sub-par. The assessee bore the risk of loss or damage to the goods during transit to the destination, as evident from the transit insurance policies and the documents relating to rejection of goods by certain bu....
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....d that even if it be assumed that the assessee had paid higher Central Excise duty than was leviable, the Department was not at liberty to retain any part of such excess amount collected as duty. It is pertinent to note that the basic purpose and object of the notification in question was to promote industrialization in the north-eastern part of the country. We observe that the Revenue can retain only those sums which represent the actual duty leviable under a statute and therefore, any excess amount collected as duty ought to be refunded. 17. The assessee has further placed reliance on Board's Circular No. 59/1/2003-CX, dated 3-3-2003 and Circular No. 988/12/2014-CX, dated 20-10-2014. 18. The aforesaid circulars state that place of removal/assessable value was ascertainable with reference to the place where the sale took place or where the property in the goods passed from the seller to the buyer in terms of the Sale of Goods Act, 1930. Therefore, where the terms and conditions of sale in the relevant contracts/purchase orders unambiguously stipulated that the act of sale would be completed upon on-door delivery at the buyer's premises, as is the case of the assessee bef....
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....ssessee had paid the duty by including freight amount. Considering the judgment of the Hon'ble Supreme Court in Ispat Industries case (supra), the duty paid on freight was legally not payable. So the duty amount paid legally as well as the amount legally not payable but paid, both were entitled for refund if the refund claim was filed as per law." Hence, the Tribunal was conscious of the view taken in Nalari Ferro Alloys case, that even if the duty was legally not payable on the portion of freight which was subsequently held not includible, the same was entitled for refund of claim was filed as per law. Therefore, the decision in the case of Aditya Birla Chemicals India (supra) relied by the Revenue do not advance their case. 21. Looking from a perspective altogether different from the case of valuation of excisable goods, the entire proceedings in the instant case mainly relate to the recovery of amount already refunded claiming the same to be a case of "erroneous refund" under Section 11A of the Act. The whole basis of the Revenue that freight amount is not includible in the assessable value, as has subsequently been held by the Supreme Court in Ispat Industries (supra), to st....
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....01 SCC Online Gau 216 : (2002) 2 GLR 69, held that simply because the law has changed or earlier law laid down has been reversed, it would not entitle the revisional authority to reopen the earlier assessments..... Another Division Bench judgment of this 47. Court rendered similar findings in the case of Mahabir Coke Industries, reported in (2007) 4 GLR 515. It was held that even if subsequently the law is changed or reversed, the assessments already completed cannot be allowed to be opened as the law covering the field relating to exemption of tax to a new Industry at the time of passing of the order of assessment to be considered......" In the present case also, the Department by relying on the subsequent decision of the Supreme Court in Ispat Industries has proceeded to take a view that freight amount can never be included in the assessable value. In our view, the refund already sanctioned cannot be termed as "erroneous refund" more so in view of the fact that refund has been duly sanctioned by the Department as per the laws prevailing then duly supported by the C.B.E. & C. clarifications at relevant point of time. 22. In view of the above discussion, the appeals filed ....