TaxTMI 
TaxTMI 
2025 (7) TMI 1332
X X X X Extracts X X X X
X X X X Extracts X X X X
.... buyer; the Appellant charged certain amount from the buyer for transporting the goods, separately in the invoice and was not included in the assessable value of the product and consequentially, excise duty was not paid on the same; On conduct of an audit, it was opined that freight charged from the buyers should be included in the assessable value of the goods manufactured and cleared, in view of Section 4(3)(d) of the Act; a Show Cause Notice, dated 18.04.2012, was issued proposing the demand of excise duty of Rs. 5,39,954, for the period 2007-2008 to 2011-2012, invoking proviso to Section 11A, along with interest and penalty. Order-in-Original dated confirmed the proposals in the Show cause Notice; an appeal an appeal against the Order-in-Original, came to be dismissed by the impugned commissioner. 3. Ms. Krati Singh, Learned Counsel for the appellants, submits that the Appellant sells the goods to the buyers on ex-factory basis; under this arrangement, the Appellant/seller is not liable for any damage, loss, breakage etc. beyond its factory gate; at the request of the buyer, the Appellant transports the goods to the address provided by the buyer for which certain amount is c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Current, Scrutiny' of the CBEC Manual; the place of removal of goods shall be the Appellant's factory gate and the amount of freight charged from the buyers is not liable to be included in the assessable value of the goods. In addition, tribunal has held in several cases that the freight separately charged in the invoices shall not be included in the assessable value of the excisable goods irrespective of the fact that the sales is on ex-factory or FOR basis She relies on: • Suzuki Motorcycle India Pvt Limited 2023 (12) TMI 247 - CESTAT Chandigarh. • Schneider Electric Infrastructure Ltd and Schneider Electric India Ltd 2024 (6) TMI 373 - CESTAT Ahmedabad. • Sayaji Senthness Ltd 2024 (5) TMI 194 and followed in their own case in 2024 (9) TMI 1073 - CESTAT Ahmedabad) • Gujarat Fluorochemicals Limited 2024 (1) TMI 883 - CESTAT Ahmedabad • M/s. Hindalco Industries Ltd 2023 (11) TMI 1253 - CESTAT Kolkata followed in their own case in 2024 (6) TMI 616 - CESTAT Kolkata) • M/s. Century Infra power Pvt Ltd 2024 (6) TMI 376 - CESTAT New Delhi. • M/s Telecom Network Solutions Pvt Ltd., 2024 (2) TMI 72....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al Vehicle Running Income'; details were submitted to the department as and when asked by the department; therefore, there is no suppression or willful misstatement on the part of the Appellant; extended period cannot be invoked as held in following cases and since the demand of duty is not sustainable, the demand of interest under Section 11AA/11BB of the Act and penalty under Rule 25 of the Excise Rules read with Section 11AC of the Act is also liable to be set aside. • Reliance Industries Limited, 2023 (385) ELT 481 (S.C.) • M/s. ABB Limited, 2021 (6) TMI 1110-Karnataka High Court • M/s Reliance Industries Ltd 2023-TIOL-94-SC-CX 7. Shri Kanish Saini, Learned Authorised Representative, for the revenue, reiterates the findings of the impugned OIO and OIA. 8. Heard both sides and perused the records of the case. Brief issue to be decided in this case is as to whether the appellants are required to include the special fright charges they have collected from their customers for special transport of the good Cleared by them at the factory gate. The appellants sell their goods at the factory gate. Some customers request for transportation of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Act and the provisions of Section 4(1)(b) and Valuation Rules are not applicable. 5.3 We also find that the amount of excess freight recovered over and above the total cost of transportation is for totally independent activity and hence no connection with the manufacture or the sale of vehicles and therefore, there is no connection of the excess freight recovered with the transaction value of the vehicle sold by the appellant as the sale was on ex-factory basis. 5.4 Further, we find that the case laws relied upon by the Ld. DR are not relating to the excess freight recovered by the appellant, and therefore, the ratio of those decisions are not applicable and are distinguishable from the case laws relied upon by the appellant in support of their submissions. The objection of the Ld. DR that the case laws relied upon by the appellant relates to the period prior to 1.7.2000 is not correct. 5.5 Here, we may refer to the decision in the case of Mercedes Benz India Pvt. Ltd. cited (supra) wherein the issue of duty liability on excess freight recovered from the customers has been settled by the Tribunal and the Tribunal has held as under: "6. We have....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er time would also be includable in transaction value. We find that the excess freight collected by the appellant from their dealers was not an amount which the dealers were liable to pay to, or on behalf of the assessee, be reason of, or in connection with, the sale inasmuch as the relevant agreement of sale did not provide for such payment, the transportation of the goods having been undertaken under a separate agreement between the assessee and the transporter concerned. The buyer was not a party of this agreement. If any excess amount was collected by the assessee from a dealer towards freight, it cannot be considered to be an amount collected by the assessee by a reason of, or in connection with, the sale of the goods. It would be an amount collected by the assessee in connection with the transportation of the goods. The nexus is not between the amount and the sale of the goods but between the amount and the transportation. This aspect was noted by their lordships in the case of Baroda Electric Meters (supra) and it was held that any excess amount collected by the assessee from their customers would be a profit made on transportation and hence such amount would not be includab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or the first Appellate Authority have recorded clear findings to the effect that there is no transaction value available as per Section 4(1)(a) of the Act. In the impugned order, the only observation is that the goods are sold at the time of place of removal but not for delivery at the time and place of removal. We are not able to appreciate the distinction made here. The admitted fact is that the purchase orders indicated the agreed price ex-factory and the central excise duty is paid on such ex-factory transaction value. The appellant undertake the transportation of the goods on pre-agreed cost which is also indicated in the purchase order. There are instances when the actual cost of transportation is either higher or lower than the cost of freight mentioned in the purchase order. When the ex-factory sale value is available, the place of removal being determined as ex-factory, the question of adding anything over and above the said ex-factory price can arise only if the transaction value is not true to the provisions of Section 4(1)(a) and is tainted. There is no finding by the lower authorities to this effect. The only ground on which certain additions on the ex-factory price wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oods the said freight charges shall not include in the assessable value of the excisable goods. As regard the decision cited by the Learned AR in the case of Roofit Industries Ltd & EIMCO Ltd. (supra) both the judgments have been considered by the Hon'ble Supreme Court in the case of Ispat Industries Ltd and the same was distinguished. 5. As per our above discussion and finding, we are of the view that in the present fact of the case, the freight charges collected by the appellant separately in the invoice in respect of transportation of excisable goods is not includible in the assessable value. Therefore, consequential demand of duty, penalty and interest will not sustain. Accordingly, the impugned order is set aside. The appeal is allowed. 12. We also find that the Learned Commissioner relies on Maruti Suzuki India Ltd (supra) and that however, this decision has been distinguished by benches of tribunal across the country and was reversed by the Hon'ble Supreme Court in TVS Motors Co. Ltd (supra). We find that Hon'ble supreme Court held that: 19. The sequitur of the aforesaid discussion would be to hold that PDI charges and free ASS charges would not be included in th....