Custom, Excise & Service Tax Tribunal
M/S Shree Shyam Filaments vs Cce, Jaipur I on 15 June, 2016
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. IV DATE OF HEARING : 15/06/2016. DATE OF DECISION : 15/06/2016. Excise Appeal No. 321 of 2007 [Arising out of the Order-in-Appeal No. 264(GRM)/CE/JPR-I/2006 dated 31/10/2006 passed by The Commissioner (Appeals-I), Central Excise & Customs, Jaipur.] For Approval and signature : Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No 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 :Seen copy of the order? 4. Whether order is to be circulated to the :Yes Department Authorities? M/s Shree Shyam Filaments Appellant Versus CCE, Jaipur I Respondent
Appearance Shri B.L. Narsimhan, Advocate for the appellant.
Shri R.K. Mishra, Authorized Representative (DR) for the Respondent.
CORAM: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) Final Order No. 52173/2016 Dated : 15/06/2016 Per. V. Padmanabhan :-
The appeal is directed against the order of the Commissioner (Appeals) dated 31/10/2006. The present appeal is in the second round of litigation on the same issue.
2. The appellant is a manufacturer of manmade fiber and yarn. They have arranged their affairs in such a way that the goods are sold through their depots situated in different places. The dispute covers the period September 1998 to June 2000 and is on valuation. As per the valuation provisions of excise law at the relevant time, the appellant was required to discharge excise duty at the time of clearance of the goods from their factory at prices prevalent contemporaneously at the depots. To arrive at the assessable value for determination of duty, provisional assessment was resorted to by the Jurisdictional Assistant Commissioner. The dispute arose at the time of final assertion of the provisional assessment. The Jurisdictional Assistant Commissioner finalized the provisional assessment vide his orders-in-original dated February 2000, June 2000 and August 2000. Among the various valuation issues settled in the provisional assessment orders, the dispute pertaining to inclusion of freight and insurance amounts is before us.
3. In the first round of litigation, the orders-in-original, when challenged before the Commissioner (Appeals), were upheld in toto and were carried in appeal to this Tribunal. The appeal was decided by the Tribunal vide order dated 09/10/2003 in which the matter was remanded to the Original Authority for quantifying the duty liability of the Assessee by computing the assessable value without including the freight and insurance for transport from the depots from where the sales take place to the buyers place. He was also directed to consider the calculation mistake while computing the duty liability for the period September 1998 to December 1998 as contended by the appellant. The Original Authority passed orders in denovo proceedings vide his order dated 08/11/2005 in which he confirmed the demand of more or less similar amount as in the original proceedings. When it was carried to the First Appellate Authority, the same was upheld in toto. Carrying the matter further, the appellant is before us in the second round of litigation.
4. The appellant has challenged the impugned order mainly on the following grounds :-
(i) They have claimed that the cost of transportation from the factory to the depots are already included in the price and hence nothing more needs to be added. On the request of the purchasers, the goods are transported from the depot to the place of the customer. The cost of such transportation is recovered by them on an equalized basis. Accordingly, they have prayed that the equalized freight and insurance charges may be deducted from the depot price to arrive at the assessable value.
(ii) The Adjudicating Authority has added the cost of equalized freight and transportation to the factory gate price considering it as the cost of transportation from factory to the depot and has gone ahead and confirmed an amount which is more than the original duty demand. They have claimed that in denovo proceedings, the Adjudicating Authority has travelled beyond the scope of remand.
(iii) They have further argued that even though the terms of the remand was to exclude the freight charges from depot to customers, the same has not been complied with by the Original Adjudicating Authority.
5. The learned DR on the other hand reiterates the findings of the authority below. He further submits that the appellant has failed to supply the freight and insurance charges incurred for transportation of goods from factory to depot. Since some expenses have been incurred towards this, the same needs to be loaded on the assessable value.
6. Heard both sides and perused the records. In terms of the valuation provisions prevalent at the relevant time, duty needs to be discharged at the factory gate at depot prices. Accordingly, the cost of transportation of the goods from the factory gate to the depot will be includable in the assessable value for payment of duty. However, the cost of transportation from the depot up to the customers premises will be deductible from the depot price. Keeping this provision in mind, the Tribunal vide its order dated 09/10/2003 had remanded the matter to the Original Adjudicating Authority to allow deduction for the freight from depot to customer. The claim of the appellant before the Original Authority, as well as before us, is that the cost of transportation from the factory up to the depot already stands included in the price and there is no need to load the value further. The Original Authority has not brought anything on record to disapprove the contention of the appellant. According to him, since some expenses would have been incurred for such transportation the same is required to be added to the assessable value. He has gone ahead and loaded the assessable value for such cost, using the equalized freight claimed by the appellant as the measure of such transportation.
7. We have perused some of the depot invoices under which goods have been cleared to the customer. These invoices clearly indicate the depot price, the excise duty payable thereon and the cost of transportation from the depot to the customers premises arrived at on an equalized basis. For example the measure of such equalized freight have been taken as nil for the period September to December 1998; Rs. 1.35 per kilo in the month of January 1999 and Rs. 1.44 per kilo from February 1999 onwards. In as much as the depot invoices clearly indicate that the equalized freight is towards the cost of transportation from depot to customer, which is deductible in terms of the provision of Section 4 prevalent at the relevant time, we find no valid reason to add the cost of such freight at an equalized basis to the assessable value.
8. The Original Authority is fixated at adding the cost of transportation from factory to depot at rates equivalent to the equalized freight charged by the appellant from depot to the customer. He has disregarded the submission made by the appellant before him that the cost of transportation from factory to depot already stands included in the price. Without undertaking verification of the claim and bringing any other material on record to disapprove the claim of the Assessee, he has gone ahead and loaded the value without any basis. In the remand proceedings, this Tribunal specifically directed him to exclude the cost of transportation from the depot to the customer out of the amounts already confirmed in the original proceedings. Instead of complying with the directions, he has gone ahead and confirmed the same amount of duty considering the same as the cost of transportation from factory to depot.
9. In the light of our findings in para number 7 above, we find that the Original Authority has travelled beyond the terms of remand and such an order passed by him cannot be upheld.
10. In line of the above discussion, we allow the appeal.
(Operative part of the order pronounced in the open court.) (Archana Wadhwa) Member (Judicial) (V. Padmanabhan) Member (Technical) PK ??
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