Custom, Excise & Service Tax Tribunal
Pune - Ii vs Universal Luggage Manufacturing Co. ... on 28 June, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NOS: E/544 & 545/2004 [Arising out of Order-in-Appeal No: P-II/BKS/279-280/2003 dated 10/11/2003 passed by the Commissioner of Central Excise (Appeals - II), Pune.] For approval and signature: Hon'ble Shri Ashok Jindal, Member (Judicial) and Hon'ble Shri P.R. Chandrasekharan, Member (Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2. Whether it should be released under Rule 27 of 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? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes Commissioner of Central Excise Pune - II ...Appellant Vs Universal Luggage Manufacturing Co. Ltd. ...Respondent
Appearance:
Shri Y.K. Agarwal, Authorised Representative (SDR) for the appellant None for the respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) and Hon'ble Shri P.R. Chandrasekharan, Member (Technical) Date of hearing: 28/06/2011 Date of decision: 28/06/2011 ORDER NO:
Per: P.R. Chandrasekharan:
These two revenue appeals are directed against the Order-in-Appeal No: P-II/BKS/279-280/2003 dated 10/11/2003 passed by the Commissioner of Central Excise (Appeals), Pune - II.
2. The facts of the case, in brief, are as follows:
2.1 The assessee, M/s. Universal Luggage Manufacturing Co. Ltd., are engaged in the manufacture of plastic moulded luggage falling under Chapter sub-heading 4201.00 of the Central Excise Tariff Act, 1985. They filed three refund claims - (1) for Rs. 5,30,472/- for the period from 01/06/1998 to 30/11/1998; (2) for Rs. 6,45,114/- for the period from 01/12/1998 to 30/04/1999; and (3) for Rs. 5,32,686/- for the period from 01/05/1999 to 30/09/1999, on the ground that they paid duty on the element of equalised freight. It was contended by the assessee that they are selling these goods at a uniform price all over India and, therefore, they are eligible for deduction towards cost of transportation from the factory to depot.
2.2 The said claims were rejected by the original adjudicating authority on the ground that the cost of transportation from the factory-gate to depot is includable in the assessable value and, therefore, the assessee is not entitled for any deduction. The assessee filed appeals before the Commissioner of Central Excise (Appeals) who allowed the appeals and held that when the goods are sold at a uniform price, equalised freight charges are deductible from the normal price and no duty is chargeable on the same. The learned Commissioner (Appeals) relied on the judgments of the Hon'ble apex court in the case of VIP Industries Ltd. vs. Commissioner of Customs & Central Excise, Aurangabad 2003 (155) ELT 3 (SC) while coming to the above conclusion. The department is in appeal against the said order.
3. In the grounds of appeal it has been urged that as per the amended provisions of Section 4, effective from 28/02/19996, the definition of 'place of removal' has been expanded to include a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory and, from where such goods are removed. In view of the amended definition of the 'place of removal', it is the department's case that the cost of transportation from factory to depot is includable. The department also relies on the judgment of the Hon'ble apex court in the case of Prabhat Zarda Factory Limited vs. Commissioner of Central Excise 2002 (146) ELT 497 (SC) in support of the above contention.
4. None appeared for the respondent.
5. We have carefully considered the matter. In an identical set of facts pertaining to M/s. VIP Industries Ltd. 2003 (155) ELT 8 (SC) the Hon'ble apex court held that "where the price remains uniform or constant all over the country, it does not follow that value for the purpose of excise changes merely because the definition of the term "place of removal" is extended. The normal price remains the price at the time of delivery and at the place of removal. In cases of "equalised freight" it remains the same as per the judgments of this court set out herein above". Accordingly, the Hon'ble apex court held that the cost of transportation from the factory to the depot is not includable in the assessable value where a manufacturer includes equalised freight in the price of the goods and sells the goods all over the country at a uniform price.
5.1 The facts obtaining in the present case are identical to the one as discussed above. Therefore, the ratio of the judgment of the Hon'ble apex court in the case of VIP Industries Ltd., cited supra, applies squarely to the facts of this case.
5.2 As regards the reliance placed by the department on the judgment of the apex court in the case of Prabhat Zarda Factory Limited, the facts are different and distinguishable. In that case there was no factory-gate sale at all and the buyers took delivery of the goods at the duty-paid godown after making the payment and arranged for the transport of the goods along with insurance thereof on their own account. The issue was whether the cost of transportation from the duty-paid godown to the buyer's premises would form part of the value or not? The Hon'ble apex court held that the sale being at the duty-paid godown the freight and insurance for delivery to the customer's premises from the godown could not be included.
5.3 In the instant case, the facts are totally different as there are sales not only at the factory-gate but also at the depots and the goods are sold at a uniform price through out the country. Therefore, the ratio of the judgment of the Hon'ble apex court in the VIP Industries case, which is also later in time, applies squarely to the facts of the case under consideration.
6. Accordingly, we find that there is no infirmity in the order passed by the lower appellate authority. Hence, the department's appeals are rejected being devoid of merits.
(Operative part pronounced in Court) (Ashok Jindal) Member (Judicial) (P.R. Chandrasekharan) Member (Technical) */as ??
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