Custom, Excise & Service Tax Tribunal
M/S Nova Iron And Steel Limited vs Cce, Raipur on 27 March, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 11/02/2015. DATE OF DECISION : 27/03/2015. Excise Appeal No. 1937 of 2006 [Arising out of the Order-in-Original No. 29/Commr. (ADJ)/RPR/ 2006 dated 23/02/2006 passed by The Commissioner of Central Excise (ADJ), Raipur.] For Approval and signature : Honble Shri Rakesh Kumar, Member (Technical) Honble Shri S.K. Mohanty, Member (Judicial) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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 : Department Authorities? M/s Nova Iron and Steel Limited Appellant Versus CCE, Raipur Respondent
Appearance Shri Gagan Kohli, Advocate for the Appellant.
Shri Pramod Kumar, Authorized Representative (Jt. CDR) for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) Honble Shri S.K. Mohanty, Member (Judicial) Final Order No. 50903/2015 Dated : 27/03/2015 Per. Rakesh Kumar :-
The appellant are manufacturers of Sponge Iron. Their sales are at the factory gate. In respect of clearances where the goods are despatched for transportation by road there is no special packing. However, in the cases where the goods sold are despatched through railways, the goods are packed in bags and loaded at the factory gate in the trucks for transportation up to the railway station when the goods are unloaded and loaded into the railway wagons. In the cases where the goods were despatched to the customers through Rail, the appellant by issuing debit notes to the customers charged amounts for (a) packing of the goods, (b) loading of the goods in the truck in the factory, (c) transportation of the goods from factory to the railway station, (d) unloading of the goods at the railway station and loading into the wagons and (e) security expenses for the goods at the railway station. The period of dispute is from 01/10/99 to 30th June 2000 and from 01/7/2000 to 31/3/2004. The Commissioner in the impugned order has held that the transportation charges from the factory to railway station and unloading and loading expenses and security expenses at the railway station would not be includible in the assessable value. However, he has held that the special packing for transportation through rail and the loading expenses in the factory would be includible in the assessable value. On this basis, after giving cum duty benefit, he has confirmed the duty demand of Rs. 32,76,304/- against the appellant alongwith interest thereon under Section 11AB and has imposed penalty of equal amount on them under Section 11AC and another penalty of Rs. 4,00,000/- on them under Rule 25 of the Central Excise Rules, 2002. Against this order of the Commissioner, this appeal has been filed.
2. Heard both the sides.
3. Shri Gagan Kohli, Advocate, the learned Counsel for the appellant, pleaded that the cost of special packing in gunny bags for transportation through rail is not includible in the assessable value and in this regard he relies upon the Tribunals judgment in the case of CCE, Mumbai III vs. Vitrum Glass (Empire Inds.) reported in 2008 (230) E.L.T. 104 (Tri. Mumbai), that the goods in this case were marketable without being packed and, hence, the cost of packing in gunny bags in cases of transportation in railways would not be includible, and that recently Tribunal in the case of Goyal M.G. Gases Pvt. Ltd. vs. CCE, Ghaziabad reported in 2014 (309) E.L.T. 327 (Tri. Del.) has held that when the industrial gases being manufactured by the assessee were marketable without being packed in cylinder as the same were also being sold through pipeline besides being sold in the cylinders, the rental of rental would not be includible in the assessable value of the goods. He, therefore, pleaded that the cost of gunny bags is not includible in the assessable value.
4. Shri Pramod Kumar, the learned Jt. CDR, defended the impugned order by reiterating the findings of the Commissioner in it.
5. We have considered the submissions from both the sides and perused the records.
6. Only two issues are in dispute in this appeal. The main point of dispute is as to whether the cost of gunny bags in which the Sponge Iron is packed in the cases in which the goods are dispatched by rail is includible in the assessable value or not. There is no dispute that all the sales are at the factory gate and in the cases where the goods are dispatched through trucks there is no special packing. Since the Sponge Iron is sold at the factory gate without being packed, it is marketable as such, in our view the cost of special packing in the cases of transportation through railways would not be includible in the assessable value of the goods and in this regard we are supported by the judgment of the Tribunal in the cases of Goyal M.G. Gases Pvt. Ltd. vs. CCE, Ghaziabad (supra). In this judgment, the Tribunal has held that during the period prior to 01/7/200 and during the period w.e.f. 01/7/2000, the packing charges would not be includible in the assessable value of the goods if the goods are marketable, as such, without being packed. It is seen that same view has been taken by the Tribunal in the case of CCE vs. Grasim Industries Limited reported in 2014 TIOL 573 (Tri. Del.). In view of this, we hold that the cost of packing of the Sponge Iron in the gunny bags would not be includible in the assessable value.
7. As regards, the charges for loading of the goods on to the trucks in the factory, the same would be includible in the assessable value and the duty demand on this account has to be upheld.
8. In view of the above discussion, the impugned order is upheld only to the extent of the duty demand on the loading expenses incurred inside the factory and the rest of the duty demand, interest thereon and equivalent penalty under Section 11AC is set aside. The duty demand, which has to be upheld, is to be quantified by the Commissioner. The appeal stands disposed of as above.
(Order pronounced in the open court on 27/03/2015.) (Rakesh Kumar) Member (Technical) (S.K. Mohanty) Member (Judicial) PK ??
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