TaxTMI 
TaxTMI 
2026 (8) TMI 640
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....H 8311 of the 1st Schedule to the Central Excise Tariff Act, 1985 at their factory at Khardah, North 24 Parganas, West Bengal. The goods were sold at the factory gate and also stock transferred to various depots for further sale to the customers. The Appellant ensured to have uniform price for the goods throughout the country, the price charged at depot was same as that charged at the factory gate. 2.1. The list of important events which eventually led to passing the impugned order are summarized in the table below: Dates Event Up to 28- 09-1996 The Appellant was not including freight in the price of the goods. The Appellant was paying duty on the normal price with the element of freight shown separately on the invoices and no duty was paid on freight. 18-09- 1996 In view of the proposed changes to Section 4 vide Finance Bill, 1996-97, regarding the definition of "place of removal", the Appellant intimated to the department regarding the fact of not claiming any deduction towards freight. 28-09- 1996 Vide the Finance (No. 2) Act, 1996, Section 4 of the Central Excise Act, 1944 governing the valuation of excisable goods was amended. The definition of "plac....
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.... Again vide OIO, the demand was confirmed. It was held that extended period of limitation is invocable since the Appellant had filed declarations stating that freight and insurance amount was not collected from the customers, however, it had actually collected such amount as per departments' report dated 21-11-2001. 17-03-2016 As the copy of the report dated 21-11-2001 was not provided to the Appellant, the OIO was challenged before the Hon'ble Calcutta High Court in WP 13 of 2008. However, such writ petition was dismissed. 08-05- 2018 The matter was carried in writ appeal before the division bench of the Hon'ble Calcutta High Court in APO 97 of 2018 wherein vide final order and judgment, the Court directed the department to provide a copy of the report dated 21-11-2001 to the Appellant and to decide the case afresh. 28-9-2018 Thereafter, vide impugned OIO, again the demand was again confirmed but to the extent of Rs. 4,67,25,193/- along with interest and penalty. 2.2. Being aggrieved by the confirmation of the demands of service tax along with interest and penalty, the Appellant has filed this appeal. 3. The submissions of the Appellant are summarized as ....
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....ages, 2007 (213) ELT 487 (SC) wherein it was held that SCN is the foundation on which the Department must build up its case. If the allegations in the SCN are not specific and on the contrary vague, it is sufficient to hold that the assessee was not given proper opportunity to meet the allegations indicated in the SCN. A.7 In light of the above, the entire demand being vague cannot be sustained and is liable to be set aside. B. FREIGHT AND INSURANCE ALREADY INCLUDED IN THE PRICE ON WHICH DUTY PAID HENCE THE APPELLANT ARE NOT LIABLE TO PAY ANY DIFFERENTIAL DUTY. B.1 It is submitted that as freight and insurance amounts were already included in the value of the goods cleared to the depot and on which duty was paid, therefore, is no question of discharging any duty thereon again. The Appellant had charged an all-inclusive price without any deduction towards freight and insurance. B.2 The fact regarding the price including freight was the value on which duty was paid was indicated to the department as early as in Sep 1996 and thereafter in various correspondences. This fact was also indicated in the reply to the Show Cause Notice and also in the vari....
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.... C2. The Appellant submits that the issue whether the freight and insurance recovered from the customers is includible in the assessable value of finished goods is no more res integra and stands settled in the favour of the Appellant. C3. The Appellant submits that regarding the issue of passing on of property and retention of risk for insurance has been decided by the Hon'ble Supreme Court in the case of Escorts JCB Ltd. v. CCE, 2002 (146) ELT 31 (SC) wherein the Apex Court has held that the cost of freight and insurance are not includable in the value of the goods. C4. Further reliance is placed on the recent decision of the Hon'ble Supreme Court in the case of CCE, Nagpur v. Ispat Industries Ltd. - 2015 (324) ELT 670 (SC), wherein it has been categorically held that cost of transportation from place of removal to place of delivery is to be excluded from the assessable value. C5. The Appellant also places reliance on the decision of Hon'ble Tribunal in the case of Aditya Birla Insulators Ltd. v. CCE, Kolkata-IV- 2008 (226) ELT 377 (Tri-Kol) wherein it has been held that customer's premises cannot be held to be the place of removal since ther....
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....are legally untenable. D.4 It is submitted that allegation of fraud, suppression or willful misstatement against the assessee cannot be sustained since the Appellant has been regularly filing price lists with the jurisdictional officers. The department was always aware regarding the practice followed by the Appellant. All facts were in the knowledge of the Department. Reliance in this regard is placed on M/s. Tata Global Beverages Ltd. Versus Commissioner of Service Tax, Kolkata, 2024 (12) TMI 840 - CESTAT KOLKATA D.5 Reliance herein is also placed on the following judgments: * M/s. Mageba Bridge Products Private Limited (Unit-III) Versus Commissioner of Central Excise, Kolkata-II, 2024 (5) TMI 1054 - CESTAT KOLKATA, and * GD Goenka Private Limited vs. Commissioner of CGST, Delhi South Final Order No. 51088/2023 dated 21.08.2023- CESTAT New Delhi * Alstom Projects India Limited vs Commissioner of Central Excise, Bolpur, FINAL ORDER NO...75628/2023 dated 02.06.2023 affirmed by the decision pronounced by Hon'ble Calcutta High Court on 24.04.2024 in CEXA/7/2024. * Toyota Material Handling India Private Limited Versus Principal ....
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....depot or from depot to the actual customer. 6.1. We also find that the SCN does not consider or refer to the price list filed on 18-09-1996, wherein it was clearly stated that w.e.f. enactment of Finance Bill, 1996, the Appellant would stop availing the deduction of freight to arrive at the assessable value. Further, even the price-declarations filed post September 1996, clearly reflected that no deduction of freight and insurance was claimed by the Appellant. Even the Annexure to the price-declaration for the FY 1997-98, clearly reflects that the prices are inclusive of freight charged and that the sales of the Appellant were FOR works (and not FOR Destination). Thus, we find merit in the submission of the Appellant that the Show Cause Notice issued in this case is very vague and adopted a hypothetical methodology for computation of the demand, which is not permissible under law. 6.2. It is well a settled position of law that such vague and factually inaccurate show cause notice denies an assessee a proper opportunity to defend its case in the best possible manner. In this regard, reliance is placed on the Hon'ble Supreme Court's judgment in the case of CCE vs. Brindavan Bev....
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....to this practice to ensure that the factory gate and the depot price remained uniform and the price for the goods was uniform throughout the country. We observe that there was also no extra element of freight or insurance amount collected from the customers. It is settled law that the onus is on the department to prove that the Appellant had collected any amount towards freight and insurance in addition to the price charged and on which duty was paid 8.1. In the impugned order, it has been held that the place of the removal is the customer's premises hence the element of freight and insurance is includible in the value. In this regard, we observe that the issue whether the freight and insurance recovered from the customers is includible in the assessable value of finished goods is no more res integra and stands settled in the favour of the Appellant. The Hon'ble Supreme Court in the case of Escorts JCB Ltd. v. CCE, 2002 (146) ELT 31 (SC), in the context of inclusion of cost of freight and insurance in the value of the goods, has held as under:- 10. From the above passage it is clear that ownership in the property may not have any relevance in so far insurance of goo....
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.... up to 1-7-2000, the place of removal has reference only to places from which goods are to be sold by the manufacturer, and has no reference to the place of delivery which may be either the buyer's premises or such other premises as the buyer may direct the manufacturer to send his goods. As a matter of law therefore, the Commissioner's order and Revenue's argument based on that order that freight charges must be included as the sale in the present facts took place at the buyer's premises is incorrect. Further, for the period 1-7-2000 to 31-3-2003 there will be no extended place of removal, the factory premises or the warehouse (in the circumstances mentioned in the Section), alone being places of removal. Under no circumstances can the buyer's premises, therefore, be the place of removal for the purpose of Section 4 on the facts of the present case. 8.3. We also rely on the decision of Hon'ble Tribunal in the case of Aditya Birla Insulators Ltd. v. CCE, Kolkata-IV- 2008 (226) ELT 377 (Tri-Kol) wherein it has been held that customer's premises cannot be held to be the place of removal since there is no further removal from there. 8.4. In view of the decisions cited supra, we ....