Custom, Excise & Service Tax Tribunal
M/S.Ultimate Flexipack Ltd vs Cce, J&K, Jammu on 25 February, 2014
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision:25/02/2014
Honble Justice Shri G. Raghuram, President.
Honble Shri Rakesh Kumar, Member (Technical)
1. Whether Press Reporters may be allowed to see the order for
Publication under Rule 27 of the CESTAT (Procedure) Rules, 1982.
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
authorities?
Excise Stay Applications Nos.59751-59754 & 59769 of 2013 in
Appeals Nos.E/59073-59076 & 59087 of 2013
(Arising out of Order-in-Appeal No.201-204/CE/APPL/CHD-II(J&K)/2013 dated 1.5.2013 passed by the Commissioner of Central Excise (Appeals), Chandigarh).
M/s.Ultimate Flexipack Ltd. Appellants
Vs.
CCE, J&K, Jammu Respondent
Appearance:
Rep. by Shri D.K. Nayyar, Consultant & Ms. Surabhi Sinha, Advocate for the appellant.
Rep. by Shri Promod Kumar, Joint CDR for the respondent. Final Order Nos.51020-51024/2014 dated:25.2.2014 Per Rakesh Kumar:
The appellant are manufacturers of plastic film and printed plastic pouches chargeable to central excise duty under sub-heading no.3920 10 12 & 3923 90 90 of the Central Excise Tariff. Being located in the area notified under notification no.56/2002-CE dated 14.11.2002, they were availing the exemption under this notification. During the period of dispute, they were paying duty on the clearances made by them on FOR destination basis i.e. on the price which included the element of freight from the factory to the customers premises and after payment of duty to extent possible through cenvat credit available at the end of each month, they paid the balance duty through PLA and claimed its refund under the above mentioned notification. The department was of the view that the clearances of the appellant were not on FOR destination basis and that they were required to pay duty only on the price of the goods at the factory gate, that by paying much more duty than they were required to pay, they have claimed more refund under the above exemption notification and that the quantum of additional refund wrongly claimed by the appellant under this notification would be recoverable from them. On this basis, after issue of show cause notice, the total duty demands of Rs.37,68,137/- were confirmed against the appellant along with interest and besides this, penalties were imposed under Section 11 AC. The appeals filed against the orders passed by the original adjudicating authority were dismissed by the Commissioner (Appeals). The appellant, thereafter, filed appeals before the Tribunal which were disposed of by the Tribunal vide Final Order No.A/1251-1254/2012-EX dated 16.10.2012 by which the Tribunal remanded the matter back to the Commissioner (Appeals) for de novo decision after examining as to whether the appellants sales were on FOR destination basis as per the criteria prescribed in this regard in the Boards circular no.23.08.2007 i.e. during transit of the goods, the risk of loss of the goods or damage to the goods was of the appellant, the ownership of the goods was to be borne by the appellant and freight charges upto the customers premises were integral part of the value of the goods. It was directed that only if the appellants sales could be treated as on FOR destination basis , on the basis of the above criteria prescribed in this regard, they would be liable to duty on FOR destination basis and as such, they would be eligible for the quantum of exemption under notification no.56/2002-CE claimed by them. But if the sales cannot be treated as on FOR destination basis in the terms of the above mentioned criteria prescribed, they would not be eligible for the refund of the disputed amount under notification no.56/2002-CE. In de novo proceedings, the Commissioner (Appeals), has once again held that their sales are not on FOR destination basis. Against this order of the Commissioner (Appeals), these appeals have been filed.
2. Heard both the sides.
3. Though today the matters were listed for hearing of the stay applications since only a short issue is involved, the same was heard for final disposal with the consent of both the sides.
4. Shri P.K. Nayyar, Consultant and Ms. Surabhi Sinha, Advocate for the appellants pleaded that from the sales invoices issued by the appellants, which are on record, it is seen that each invoice mentions only a consolidated FOR price clearly mentioning the sales to be on FOR destination basis, that mentioning in the invoice that the sales are on FOR destination basis itself indicates that during transit, the risk of loss of the goods was of the appellant and ownership of the goods during transit was also of the appellant, that the goods during transit have been insured by the appellant only and they have borne the cost of the insurance, that the judgements of Apex Court in the case of M/s. Escorts JCB Ltd. Vs. CCE, Delhi 2002 (146) ELT 31 (SC) and Accurate Meters Ltd. reported in 2009 (235) ELT 581 (SC) are not applicable to the facts of this case, as this is not the case where the sales were at the factory gate, that in view of this, the impugned order is not correct.
5. Shri Promod Kumar, learned Joint CDR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that the appellants sales were not on FOR destination basis, that no evidence in this regard has been produced by the appellant to prove that they satisfy the criteria prescribed in the boards circular dated 23.8.2007 and that in view of this, there is no infirmity in the impugned order.
6. We have considered the submissions from both the sides and perused the records.
7. The invoices issued by the appellant mention only one consolidated FOR price and also mention that the sales are on FOR destination basis. This fact is not disputed by the department. When the invoices themselves mention the sales as on FOR sales, risk of loss of goods or damage to the goods during transit would be of the appellant and the ownership of the goods during transit would be treated as of the appellant and if the Department alleges that the sales are not as FOR basis, the burden of proof in this regard would be on the Department. Just because there are no purchase orders placed by the customers or there are no agreements between the appellant and their customers regarding sale of the goods and the terms of sale, it cannot be concluded that the sales are not on FOR destination basis. We find neither any inquiry in this regard has been conducted by the Department nor any evidence has been produced. In view of this, the impugned orders are not correct. The same are set aside. The appeals are allowed. The stay applications also stand disposed of.
( Justice G. Raghuram ) President (Rakesh Kumar ) Member (Technical) Ckp.
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