2019 (1) TMI 899 – CESTAT NEW DELHI – TMI – Valuation – inclusion of freight charges borne by the customer of the appellant separately in the assessable value – extended period of limitation – Held that:- It is on record that all such cases the freight element has been borned by the customer. The assessee has not paid any amount towards the freight charges.
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The CBEC Circular No. 988/12/2014-CX. dated 20.10.2014 has clarified in their circular that in such a situation the freight charges are not to be included in the assessable value – This issue is also decided by the various Court and Tribunal that when the factory gate price is available and freight is borned separately by the customer in view of the decision cited supra, the same is not includible in the assessable value.
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Extended period of limitation – Held that:- It is on record that the demand has been raised as per the audit objection and the entire activity of appellant was known to the department – in this case t
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engaged in the manufacturing of supercera ceramic fibre falling under Chapter heading 69039030 of the first schedule to Central Excise Tariff Act, 1985. The appellant was issued two show cause notices dated 10.3.2016 on the ground that they were selling their finished goods from the factory gate as well as from the depot. In the case of depot sale, the appellant has shown the amount of freight on invoice separately and recovered the same from depot but failed to included the said amount of freight while arriving at the assessable value of the goods and failed to pay Central Excise duty on the said amount during the period 2011-2012 to 2014-2015. Show Cause Notice was adjudicating by the adjudicating authority and demand for recovery of Central Excise duty along with interest was confirmed and a penalty of equal amount were also imposed. The said order was appealed before the ld. Commissioner (Appeals) by the appellant. Vide the impugned order the Commissioner (Appeals) has passed the o
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be discharged under the provisions of Central Excise Act. (b) In the second mode of sale depot of the appellant procured the order for various projects from customers falling in their jurisdiction. The jurisdictional depot procure the order from the customer and owns the responsibility of supplying the goods for their project as per order of customers. Accordingly, the concerned depot of the appellant places the order on the unit of the appellant at their plant at Pithampur, indicating the bifurcation of price, excise duty on the basis of the order placed by the customers. Thus the assessable value of the product is the price at factory gate. The transportation charges are charged on actual basis. In such cases the price of the product sent to the depot for delivery always remained either same or more than at the factory gate or in some even more that. It was, therefore, argued that in such cases the price charged by the appellant should be ex. factory price. However, audit proposed in
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issued on 10.3.2016, which accordingly to appellant is time-barred. It was further submitted that in case where goods were received in depot against no specific order of the customer but the price remained same when it was cleared to the independent factory gate. Ld. Commissioner (Appeals) confirmed the demand by treating the place of removal in both the cases to be depot. Accordingly, on the basis of explanation to Rule 5 of Central Excise Valuation Rules, 2000 concluded that freight charges are liable to be added in the assessable value. The appellant sought price charged to their various customers at the factory gate as well as for the project cleared from the depot. It is seen from the price list that the submission of the appellant that they are charging the price ex. factory is more or less the same to that which are being charged at the depot for these projects site. (d) Demand raised on the freight charges shown separately on the invoices by the appellant in respect of the good
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uyer. Is it at the factory gate as claimed by the appellant or is it at the place of the buyer as alleged by the Revenue? In this connection it is necessary to refer to certain provisions of the Sale of Goods Act, 1930. Section 19 of the Sale of Goods Act provides that where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred. Intention of the parties are to be ascertained with reference to the terms of the contract, the conduct of the parties and the circumstances of the case. Unless a different intention appears; the rules contained in Sections 20 to 24 are provisions for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer. Section 23 provides that where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable stat
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It was also submitted that in this case the entire issue was known to the department and there is no suppression of any fact by them so as to attract the provisions of Section 11A of the Central Excise Act. The demand was raised after the audit objection. Prior to the audit objection the assessee unit have always been subjected to previous audit by the department and the entire facts were known to department. Even in the invoices issued by the appellant, there were having specific and separate entries about the freight charges which were not being included for the purpose of arriving at the assessable value. Further, it was submitted that there had been various audit prior to the current audit where no such objection were raised in past. Thus, the practice followed by the appellant was in the knowledge of the department and the extended period of demand of the duty under Section 11A of the Central Excise Act is not invokable. In this regard, the reliance was placed on the judgement de
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as per Central Excise Valuation Rules, 2000 and the same is, therefore, required to be upheld in appeal. 6. We have heard the parties and considered the appeal records carefully. 7. The issue involved in this case is regarding inclusion of freight charges borne by the customer of the appellant separately in the assessable value as per the CVR, 2000. The appellant assessee are having two streams of the sale one at the factory gate and other to the various projects undertaken by them for which the sale is made through depot. It is on record that all such cases the freight element has been borned by the customer. The assessee has not paid any amount towards the freight charges. In this regard, we find that the CBEC itself has clarified in their circular that in such a situation the freight charges are not to be included in the assessable value. This issue is also decided by the various Court and Tribunal that when the factory gate price is available and freight is borned separately by the
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