TaxTMI 
TaxTMI 
2026 (2) TMI 4
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.... 1985. On the basis of intelligence, investigation was initiated against the appellant by retrieving records and recording statements etc. It is alleged that the appellant are availing SSI exemption under Notification No. 8/2003-CE dated 01.03.2003 and during the period from November 2010 to December 2014 while availing SSI exemption up to the value of Rs.1.5 crores, the appellant had collected excise duty of Rs.66,83,256/- on the goods by raising commercial invoices indicating the price as inclusive of duty which was proposed to be recovered in terms of Section 11D(1A) of the Central Excise Act, 1944. Also, on verification of the relevant invoices and purchase orders, it was noticed that though the condition of clearances of sale is on FOR basis, the appellant had not included the value of cost of delivery / transportation in the assessable value claiming the clearance as ex-factory thereby short paid excise duty of Rs.28,75,181/-; also it is alleged that they have not paid an amount of Rs.17,41,907/- for clearance of goods for the period October 2013 to December 2014. Consequently show-cause notice was issued to them for recovery of duty of Rs.66,83,256/- under Section 11D and Rs....
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....the Central Excise Act, 1944 read with Rule 5 of the Central Excise Valuation Rules, 2000, transportation charges are not to be included in the assessable value when the goods are sold at the factory gate and transportation is arranged by the buyer. He has submitted that in the present case, the contracts were ex-factory and transport was arranged by the appellant on behalf of the customers and the transportation cost are separately recovered from the customers. These expenses were shown separately on the excise invoices. He has submitted that since the sale was completed at the factory gate, the cost of transportation cannot be part of the assessable value of the goods as per Section 4(3)(d) of the CEA, 1944. Further, he has submitted that as for as clearances to NAPC is concerned, the adjudicating authority relied upon the statement of officers of NAPC without accepting the letter dated 15.06.2014 issued to clarify the terms and conditions of the contract. He has submitted that in view of the settled law in the case of CC&CE vs. Ispat Industries Ltd. [2015(324) ELT 670 (SC)], place of removal ought to be considered as the place of manufacture. The reliance placed by the adjudicat....
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....e from their customers. Accordingly, duty is recoverable under Section 11D of the CEA, 1944. Referring to the Purchase Orders dated 26.05.2024 of NAPC and MOU with BPCL, it is clear that the terms and conditions are for supply and laying of CC blocks in their premises at Mangalore. The appellant, in order to misguide, deliberately mentioned in their invoices as ex-factory price even though the delivery is on FOR basis/at site basis. The ownership of goods is transferred only at buyer's site/premises; hence, transportation and loading/unloading charges ought to be included in the assessable value. The letter dated 15.06.2014 from NAPC reveals reconfirmation of terms and conditions of the purchase orders dated 26.05.2014. Further, the said letter creates confusion; hence, cannot be relied upon. The statements of the Billing Engineer Mr. Sudikonda Ravi Kiran of NAPC dated 06.02.2015 clearly indicated that the delivery of goods is on FOR basis at BBMP site; hence, the ownership of goods is transferred to the customers only at project site, which has also been confirmed by the Project Manager Mr. M. Ashok. It is observed at para 23 of the Ispat Industries Ltd.'s case that in cases where....
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....any amount in excess of the duty assessed or determined and paid on any excisable goods or has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty from any person in any manner, shall forthwith pay the amount so collected to the credit of the Central Government. (2) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (1A), as the case may be, and which has not been so paid, the Central Excise Officer may serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (3) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (2), determine the amount due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (4) The amount paid to the credit of the Central Government under sub-section (1) or sub-sectio....
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....with pay such amount to the Central Government. Evidently, it did not cover the goods which are only wholly exempt from duty but on which manufacturer collects some amount as representing Central Excise duty. This lacuna was corrected by introduction of Section 11D(1A) in 2008. The Budget Speech of the Hon'ble Finance Minister for the year referred to above clarifies that prior to 2008 this Section 11D did not cover those goods where the goods were wholly exempted or were chargeable to Nil rate of duty as in the present case. The amendment in 2008 has not been given retrospective effect. For this reason, the liability to Section 11D does not apply to the appellant's goods because undisputedly, the products were fully exempted from payment of duty. A plain reading of Section 11D also shows that what is required to be deposited in the Government exchequer is any amount collected as representing excise duty. In this case there is nothing on record that they have collected any amount as representing excise duty. They have collected a consolidated amount stating it as inclusive of Excise duties. No specific amount was shown as representing excise duty. On this ground also, the demand do....
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....ice charged by the respondent for unblended motor spirit to the customers. In the invoice the duty paid on motor spirit (EBP) was not shown separately attributable to Motor spirit and Ethanol, but the sale price of EBP was a composite inclusive of duty. Thus, the price charged was inclusive of duty, and the duty attributable to Ethanol was not shown and recovered separately in the invoice, the same could not be recoverable under section 11D of C.E. Act. It may also be observed that only where any amount is collected representing as excise duty, the same is required to be credited to the Government. This is a case in which the revenue could not show that the respondent after blending ethanol with duty paid motor spirit collected amounts separately, mentioning the duty on ethanol in the invoices, but the same was not credited to the Government. In such situation, Section 11 D of C.E Act was certainly not attracted as the crucial requirement to attract Section 11 D was certainly not being fulfilled for the revenue to invoke Section 11D of the C.E. Act." Following the aforesaid judgments, the confirmation of demand of Rs.66,83,256/- under Section 11D cannot sustained. 10. On the ....